argenx SE (ARGX) Q4 2025 Earnings Report, Transcript and Summary

Good morning. My name is Rob, and I will be your conference operator today. I would like to welcome everyone to the call. [Operator Instructions] I'd now like to introduce Beth DelGiacco, Vice President of Corporate Affairs. You may now begin your conference.

Thank you. Two press releases were issued earlier today, one sharing the positive results from our Phase III ADAPT OCULUS study and the other, which outlines our fourth quarter and full year 2025 financial results and business update. These can be found on our website along with the presentation for today's webcast. Before we begin on Slide 2, I'd like to remind you that forward-looking statements may be presented during this call. These may include statements about our future expectations, clinical developments, regulatory time lines, 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 Karen Massey, Chief Operating Officer; Karl Gubitz, Chief Financial Officer; Luc Truyen, Chief Medical Officer; Sandrine Piret-Gerard, Chief Commercialization Officer; and Tim Van Hauwermeiren, Chief Executive Officer. I'll now turn the call over to Karen.

Thank you, Beth, and welcome, everyone. I'll begin on Slide 3. 2025 was an incredible year of execution for argenx. We reached 19,000 patients globally, driven in part by the successful launch of our prefilled syringe for self-injection. We also continue to advance our deep and differentiated immunology pipeline, including 4 new molecules from our IIP, positioning us for sustained long-term growth. This progress is grounded in our commitment to patients to innovate in ways that don't just improve care, but meaningfully change what patients can expect from their treatment. I'm speaking to you today from our U.S. national team meeting, where hearing directly from patients is a powerful reminder of why our work matters. One moment in particular, stayed with me. We recently received a handwritten note from a patient, thanking the team for the impact VYVGART has had on her life. We later learned that before starting treatment, she had been living with very severe MG symptoms that significantly limited her day-to-day activities. Today, at the meeting, we saw a video of the patient about a year into treatment with VYVGART Hytrulo, sharing an update from a hype she was on. She is thriving. It's one individual story, but it reinforces the real-world difference VYVGART can make. Slide 4. At the start of the year, we outlined our strategic priorities for 2026 that will guide our next chapter of growth towards Vision 2030. We want to impact more patients globally with VYVGART through broader patient adoption and label expansion. We're shaping the future of FcRn medicines with next-generation molecules, delivery modalities and combination approaches and delivering the next wave of immunology innovation, supported by a strong late-stage portfolio and a goal of at least one new pipeline candidate per year. Slide 5. VYVGART is leading the growth of biologics in both MG and CIDP, and we're confident that we have the right strategies and milestones ahead to sustain this momentum. Today marks an exciting moment for ocular MG patients with the positive ADAPT OCULUS results, which Luc will discuss shortly. Together with our progress in seronegative MG, we see a meaningful opportunity to broaden VYVGART's reach to patients who have historically had limited or no targeted treatment options. What's guided us here is a long-standing commitment to the MG community and to advancing our understanding of the underlying biology of the diseases we treat. Across MG populations, our data confirm that disease is driven by pathogenic IgGs regardless of antibody status. In seronegative MG, we demonstrated a clinically meaningful improvement in MG-ADL in the overall population with responses becoming more pronounced with subsequent treatment cycles across all subtypes. In ocular MG, we're seeing that same biology extend to another patient population with VYVGART meeting its primary endpoint and driving clear improvements in ptosis and diplopia. Our seronegative PDUFA date is May 10. And based on today's results, we see a clear path to expanding our label into ocular MG as well, positioning VYVGART to have the broadest MG label and to reach our target addressable population of approximately 60,000 patients in the U.S. In CIDP, we're also having a meaningful impact on patients with clinical data showing functional improvement and these benefits increasingly reflected in real-world experience. VYVGART is driving a paradigm shift in CIDP. While there remains significant opportunity within the initial 12,000 addressable patient population, we're also beginning to see expansion beyond that population, a core focus as we build leadership in CIDP. Sandrine will speak more to this later in the call. Slide 6. Over the next 12 to 18 months, we have multiple avenues for expansion beyond MG and CIDP, including autoimmune myositis and Sjogren's disease, which broaden VYVGART's footprint into rheumatology. In particular, our work in IMNM highlights a significant unmet need with an estimated 20,000 patients and no approved treatment options today. Meanwhile, our upcoming Q4 readout for empasiprubart in MMN marks an important milestone, positioning us to advance a second medicine to patients and extending our neurology footprint with a first-in-class C2 inhibitor. We have an opportunity to address a clear unmet need in MMN with IVIg as the only approved treatment and symptom progression in 60% of patients. Slide 7. Lastly, we continue to strengthen the pipeline that will shape our long-term future. VYVGART is just the beginning of FcRn leadership that we aim to establish for decades to come. As part of this, we're advancing 2 next-generation assets, ARGX-213 and ARGX-124. We're investing in efgartigimod anchored combination approaches and new delivery modalities like the auto-injector and oral peptide capabilities. At the same time, we're seeing real momentum across our broader innovation platform, progressing first-in-class molecules like ARGX-121 targeting IgA and ARGX-118 targeting Galectin-10. We are deliberately source agnostic in how we identify new biology drawing from both leading academic research and opportunities emerging within biopharma. In 2026, we expect to progress 3 Phase I programs, including a program from our Tensegrity collaboration, reinforcing our ability to bring forward high-quality science wherever it originates. We have an exciting year ahead of us with a strong foundation in place and exciting progress across the pipeline. Let's turn to the data that's shaping our next steps. Luc?

Thank you, Karen. I'm excited to share the positive outcome of our Phase III ADAPT OCULUS study. Our second MG expansion milestone to hit just months after we shared positive seronegative data. Let's turn to Slide 8. Together with leading global experts, our team designed the first registrational study in ocular myasthenia gravis, filling a long-standing gap for the patient population that has historically been excluded from clinical trials. We leveraged the screening period to ensure patients had a confirmed diagnosis of ocular MG, defined as MGFA Class I, meaning patients had meaningful measurable eye symptoms without evidence of generalized disease. Patients were also required to be on stable background therapy. 141 patients were randomized 1:1 to VYVGART Hytrulo versus placebo. And in Part A, they received 4 weekly injections. In Part B, participants received multiple cycles of VYVGART Hytrulo. The primary endpoint of the study was a change in MGII patient-reported ocular score from baseline to day 29, a measure focused on the key ocular symptoms of myasthenia gravis, diplopia and ptosis. Slide 9. The study met its primary endpoints. Treatment with VYVGART Hytrulo led to a statistically significant improvement in MGII patient-reported ocular score at week 4 compared to placebo with a p-value of 0.012. VYVGART-treated patients experienced a mean 4.04 point improvement compared to a 1.99 point improvement on placebo, including clear improvements on diplopia and ptosis. VYVGART was well tolerated, upholding its consistently strong safety profile with no new safety signals. We will present a broader data set at an upcoming medical meeting. This is a big day for patients. Ocular MG strips people of independence. Many suffer from headaches and the persistent double vision and drooping eyelids don't just affect eyesight, they can take away the ability to drive, work and confidently engage in daily life, often with a heavy psychological burden and stigma. And today, too many patients are still relying on chronic steroids and symptomatic therapy, which comes with an unacceptable treatment burden over time. For the first time, we are bringing forward a therapy that specifically addresses the underlying pathological mechanism of ocular MG, and that is something we should all be excited about. Based on these results, we plan to file an sBLA with the FDA. Now before I turn the call over to Karl, I want to sincerely thank the investigator site teams and most importantly, the patients and families who made this study possible. Karl?

Thank you, Luc. Slide 10. The fourth quarter and full year 2025 financial results are detailed in this morning's press release. Product net sales are consistent with our preannouncement in January at $1.3 billion for the fourth quarter and $4.2 billion for the full year, which represents a year-over-year growth of 90%. Regional breakdown of product revenue in Q4 2025 reflects $1.1 billion in the U.S., $63 million in Japan, $110 million in the rest of the world and $26 million in product supplied to Zai Lab in China. The product net sales in the U.S. grew by 68% from the fourth quarter of the prior year, reflecting solid patient demand and prescriber confidence driven by PFS. The gross to net adjustments and the net pricing in the U.S. are in line with the prior quarter. Next slide, Slide 11. Total operating expenses in the fourth quarter are $955 million, representing an increase of $149 million compared to the third quarter. Cost of sales for the quarter is $150 million as our year-to-date gross margin remains consistent at 11%. The combined R&D and SG&A expenses totaled $2.7 billion for the full year, which is in line with our financial guidance for 2025 discussed in our most recent earnings call. Looking ahead into 2026, operating expenses will continue to grow at a similar percentage as in prior years. SG&A growth will support the significant revenue growth in our current markets as well as expansion into new patient populations. R&D expenses will increase due to our continued commitment to execute on our pipeline. Our operating profit for the quarter is $367 million and $1.1 billion for the year, which marks our first year of annual operating profitability. Tax for the quarter and full year reflects a net benefit. This is largely due to nonrecurring tax items and favorable foreign exchange movements. Going forward, you should continue to expect an effective tax rate in the low to mid-teens. This brings us to the profit for the fourth quarter of $533 million and $1.3 billion for the full year, respectively. Our cash balance represented by cash, cash equivalents and current financial assets is $4.4 billion at the end of the fourth quarter, which represents a more than $1 billion increase over the year. The strength of our balance sheet allows us to invest with confidence in growing our commercial business as well as our pipeline. I will now turn the call over to Sandrine, who will provide details on the commercial front.

Thank you, Karl. Slide 12. I'm thrilled to be joining argenx at such a pivotal moment. What excites me most is the combination of bold science and a deeply patient-driven mission, what I often describe as science with purpose. I've spent time in the field already, met clinicians and seen firsthand the real impact our science is having on patients' lives. With Vision 2030 as a road map, we have a clear path to meaningfully improve the lives of more than 50,000 patients. Slide 13. Echoing Karen, we entered 2026 from a position of strength following a year of phenomenal execution. We closed 2025 with approximately 19,000 patients on treatment globally, reflecting consistent growth across all regions and all indications. We successfully launched the prefilled syringe, which has proven to be a key driver in increased overall VYVGART demand. At the end of the fourth quarter, we had more than 4,700 prescribers, including dozen new prescribers since the PFS launch. This momentum underscores the execution strength of our field teams, the added convenience the PFS brings to patients and the growing confidence in VYVGART among clinicians. As we highlighted at the start of the year, our next chapter is about applying a proven indication expansion playbook to reach even more patients. MG and CIDP remain the cornerstone of our commercial strength, and we are well positioned to build on that foundation as we scale. Slide 14. We entered the MG market with strong biology and a first-in-class therapy. Since then, we have redefined what patients and clinicians can expect with the highest MSE and a favorable safety and tolerability profile. As a result, VYVGART is the fastest-growing and #1 prescribed biologics in MG with continued momentum driven by earlier line adoption. 6 out of 10 MG patients starting on biologic start with VYVGART. 70% of VYVGART patients are already coming from orals, and we believe the PFS will continue to help drive near-term growth. We are now on track to reach 18,000 additional patients through 2 label expanding opportunities, seronegative and ocular MG. Seronegative MG alone has the potential to move us towards the broadest possible MG label with our May PDUFA just around the corner. And ocular MG gives us a chance to be the first to market in a patient group that has had no precision treatment options. What gives us confidence here is that these expansions build on strong relationships we have already established with neurologists, many of whom are confident in VYVGART through experience treating generalized MG. Slide 15. We are earlier in the CIDP launch trajectory, but are delivering on the same disciplined approach that has led to our successful market expansion in MG. Significant opportunity remains within the 12 dozen patients who are not well managed on current treatment, and our focus today is on continued evidence generation, patient activation and new prescriber adoption. Clinicians continue to respond to the meaningful functional benefit data and well-characterized safety shown in the ADHERE trial. The prefilled syringe is further driving uptake by reducing the administration burden and offering more flexibility to patients. Worth noting, we secured an important access win for PFS in Q4 with UnitedHealthcare, broadening our covered lives to over 90%. CIDP is a highly heterogeneous disease, and we are committed to advancing the science to expand our reach to broader set of patients. Our biomarker program is designed to better define responders and unlock earlier and broader use, and we are advancing empasiprubart in a head-to-head study against IVIg to further explore the bounds of efficacy. Together, these efforts position us to expand the CIDP population we can serve and continue shaping this market over the long term. Slide 16. Our clinical pipeline continues to broaden and deepen, providing a multiyear runway for commercial growth. I'm excited to join the company at this pivotal moment to help scale the organization thoughtfully and translate this pipeline into even greater patient impact. With that, I'll now turn the call over to Tim.

Thank you, Sandrine. Reflecting on where we stand, argenx has never been better positioned, and our leadership transition comes at the right moment as we enter our next phase of growth. Karen is the right leader to take this forward. She understands our innovation playbook, leads with patients at the center of every decision and brings the operational discipline needed to continue executing against Vision 2030 and beyond. I have complete confidence that she will nurture what has always made argenx special while driving the next chapter of growth for the company. My dedication to argenx and to our mission remains as strong as ever. I look forward to supporting Karen and the entire leadership team as we continue to advance meaningful innovation and deliver for patients and shareholders alike. With that, operator, we will open the call up to questions.

[Operator Instructions] Your first question today comes from the line of Tazeen Ahmad from Bank of America.

First off, Karen, congratulations on the new role. We're looking forward to continuing to work with you. And Tim, what else can I say, but thank you. You've set the example for everyone to follow, and we wish you the best in your new upcoming role as well. So my first question is going to be on the addition of both seronegative as well as based on today's results, assuming ocular MG to the revenue stream for VYVGART. How should we think about, number one, what the average price would be for each of these subindications? And can you talk to us about what proportion -- you talked to us about how many patients there are. But have you done any market data research to indicate what proportion of those patients are more likely to seek this type of treatment?

Well, thank you, Tazeen, for your comments and also for your question. It's a really exciting day for ocular MG patients and certainly for argenx, as you call out. It's important to think about the fact that we are now the first and only -- or VYVGART is the first and only to have positive data for patients with ocular MG. So a really exciting day for patients. And as you called out, that, combined with the seronegative data that just read out a few months ago, and we have the PDUFA date in May, really positions us well for continued sustained growth in MG and I think an expansion even further of our leadership position in MG. So we're very excited to share that data today. I'll let Karl talk to the price in a moment. But just on the second part of your question around the addressable market, we obviously have done quite a bit of market research, and we'll continue to do so to prepare for how best to go to market. But the best numbers to look at are those that we've provided with the seronegative expanding the addressable market by 11,000 patients and ocular by 7,000 patients that we've provided before. That 7,000 patients in ocular MG, that's not the total ocular MG patient population. That's actually the portion that when we've done the research before, we thought would be eligible for VYVGART. So that's the number that I would stick with. And obviously, as we get closer to -- as we unpack the data more, as we get closer to submission and hopefully approval, we'll be able to provide more color on that. And then maybe, Karl, you could comment on the price.

Thank you, Karen and Tazeen, thank you for the question. Yes, we still have to have the discussions with the players, of course. But I do want to mention that we have a strong capability and market access. It is an enabler of our launch, not a hurdle, and the value proposition of VYVGART is well understood and appreciated by all stakeholders. At this stage, I will say that we would expect to have broad access also for seronegative and ocular, and we can assume a similar price as MG, i.e., $225,000 the net benefit or a net price to argenx. Thank you for the question.

Your next question comes from the line of Danielle Brill from Truist Securities.

I think I'll ask a question on the CIDP opportunity. Karen, you mentioned in your prepared remarks that you're beginning to see expansion beyond the initial 12,000 patients that you were targeting. Can you elaborate a bit? Are you seeing a step-up in frontline use? And then I think you also mentioned that you secured additional coverage, broadening coverage for PFS to over 90% of covered lives. What impact do you expect this to have on adoption rates in the setting going forward?

Thanks, Danielle, for the question and the interest in CIDP, we're really pleased with the continued growth in CIDP. So, yes, we laid out that the strategy was first to focus on that 12,000 patients that are treated -- that are already treated, but continue to have symptoms. And that is -- continues to be where we see the majority of our patients and the majority of our growth. But you'll recall that our label does allow us to be used in a broader patient population. And there are some payer policies actually that also allow that. So we are starting to see some use of VYVGART beyond just the switch from IVIg. In general, it's still about at 85% of our patients are being switched from IVIg, but there are some that are coming directly. I think as prescribers and neurologists get more experience with VYVGART and see the impact in the real world, then over time, we'll start to see that expansion even more. And as you said, continuing to expand access with the recent UnitedHealthcare decision and having 90% coverage, that also helps to contribute to our growth. So I would say what to expect in CIDP is that continued steady momentum. We're still early in the launch. And so I think we still have some quite a bit of growth ahead of us.

Your next question comes from the line of Derek Archila from Wells Fargo.

Congrats on the progress in the Phase III win today. So I had a question on, do you think approval in ocular MG will drive more utilization in the less advanced MG patients? And I guess, is there anything in the data set that you'll present in the future that could demonstrate prevention of progression to more generalized disease?

Yes. Thanks for the question, Derek. I'll comment on the first and then maybe, Luc, I can hand it to you for the data. So certainly, I think that our hypothesis, I mean, we know that in MG, the majority of patients first do present with ocular symptoms and then the majority of those ocular MG patients do transition into gMG. So a big part of our strategy is expanding the use of biologics to earlier line uses of MG. We are already seeing that. Biologic use is growing in generalized MG. We are driving -- we get 6 out of 10 of those patients that are first use biologics. So we're driving a lot of that earlier use and a lot of that growth. As you say, I think the ocular MG data will help us with that strategy and will provide a halo to that strategy. And then maybe, Luc, you could comment on the data and progression.

Yes. Thanks, Karen, and thanks, Derek, for the question, which is close to my heart. So with the data in hand, we show that we can meaningfully impact the current symptomatology of ocular MG, which is not MG like. It's a significantly debilitating state to be in. But of course, the excitement of continuing to collect long-term data as we are planning to do and compare that to what is known with the natural progression, which, as Karen said, is a high percentage up to 80% will allow us to make some statements on do we delay progression to generalized MG. So I would say stay tuned.

Your next question comes from the line of Yatin Suneja from Guggenheim.

Just with regard to the Q1 dynamics, could you point to us if there are any particular consideration that we should have for Q1 in particular?

Yes. Thanks for the question. And it's important as we're in Q1. So obviously, across the industry, we can see the pattern that there always are Q1 dynamics around reverifications and winter storms, of which we've had quite a few in the last couple of weeks. So argenx and VYVGART are, of course, privy to the same, those same seasonal dynamics. And we saw that last year as well. If you recall, we did have a slowdown in Q1. And then in the end of the year, we delivered 90% full year growth. So I think you can recognize the pattern and expect that. But maybe, Sandrine, you could comment on the underlying dynamics that we're seeing since you've joined.

Yes. Thank you, Karen. And this is something that I looked at before joining argenx, what is the growth we are seeing. And year-after-year, we have been delivering consistent growth, and this is a pattern you can expect this year, full year because the underlying dynamic are very healthy. I mean when you look at the new patient starts, the provider and the prescriber expansion. When you look at our access, we just mentioned that, but also how strong we are and VYVGART is in leading the growth of the overall biologic market. These are all amazing underlying factors that will help us continue that growth. And then you have the PFS that was launched less than a year ago that drove a lot of momentum last year, plus the expansion of the labels that we are expecting both for seronegative and later for ocular. So all are good underlying factors that will help us continue that growth, as Karen mentioned.

Your next question comes from the line of James Gordon from Barclays.

James Gordon from Barclays. The question was on VYVGART for myositis. And my question was, what is the efficacy bar you're looking to exceed in the Phase III in myositis in Q3? What's a good result? Is there hope to be more efficacious than [ brepo ] or JAK/TYK and what they did in the VALOR trial? Or is it more -- a good result would be if you had a similar efficacy and you are better tolerated as well? So what's good and what's really good? And could I also just squeeze in a clarification, not a question, but just normally, there's an OpEx guide, but I didn't see a formal guide this year. Should we assume a similar pace of OpEx growth this year as last year, so '25 similar pace of '26 and maybe more R&D and less SG&A? How do we think about spend this year, please?

Yes. Thanks for the questions there, James. And so I'll open. I'll hand over to Luc to provide some more color on myositis and then Karl on OpEx. But the first thing that I just wanted to frame is when you think about myositis, it's right out of the argenx playbook. I mean there is so little options available to patients here, really limited innovation in the market. And so what we're looking for is a statistical significant benefit coming out of this study. In the DM, in IMNM, there are no approved therapies available. And you heard in the script that there are 20,000 patients with IMNM. So for them, any benefit, I think, is clinically meaningful. But maybe, Luc, you could talk about how we're thinking about the study.

Yes. Thanks and also for laying it up that this is not a singular indication. So this is a constellation of indications that each have somewhat different pathological drivers. We continued our Phase III program based on the strength of a robust Phase II, which gave us the confidence that we could provide meaningful benefit across the 3 subsets. Ultimately, the data will speak once we complete Phase III. With respect to relative benefit compared to others, of course, studies are hard to compare. And the DM result of brepo certainly is encouraging for the DM patients. But we believe that in DM, multiple modes of actions could play a role. And therefore, we will go on the strength of our own data. In any event, positive data in these diseases is always good for the patient.

Thank you, Luc. And maybe, Karl, a comment on the OpEx.

James, thank you for the question. Yes, in 2025, we spent around $2.7 billion on combined R&D and SG&A. That is around 30%, 3-0 percent increase over 2024. Looking ahead, you can expect the combined R&D and SG&A to grow at a similar rate with most of the growth in R&D because that is where we're going to invest to set the company up for the long run, investing in our very exciting pipeline. So thank you for the question, James.

Your next question comes from the line of Alex Thompson from Stifel.

Maybe on Graves, I was wondering if you could comment on where you're at from a regulatory discussion perspective on starting the pivotal and whether you think that a single pivotal could be sufficient for an sBLA or whether you might need 2 studies.

Yes. Thanks for the question. We're excited about our Graves program, and it's well underway. Luc, do you want to comment on our strategy around the single study?

Well, I mean, the ability to run a single study has sufficient evidence of efficacy and be able to define a benefit risk is actually not new. That always existed, but it was at the discretion of the individual divisions as to how much they accepted that or not. This particular division has asked us at this moment for 2 trials, which we are executing on.

Your next question comes from the line of Matt Phipps from William Blair.

Congrats on the quarter and progress here. Just wondering if you might be able to give us any more details on the auto-injector, how you can position that versus the PFS and maybe if that can just continue the continued expansion you're seeing from that PFS launch across indications.

Yes. Thanks for the question. We're excited about the auto-injector, and I think it just reinforces our innovation playbook, right, just continually bringing more and more innovation as we drive leadership in the MG market. So auto-injector is on track. We have planned for 2027. And the way we've talked about it is it won't be such a step forward in the way that PFS was because if you recall, the big step forward for prefilled syringe was that we moved from HCP administration to patient administration, and that was a meaningful and important step forward for many patients, giving them the freedom to self-inject. So auto-injector doesn't provide that step change, but it does provide an important step, for patients that provides a better experience for those patients and especially those that are needle phobic. Actually, we mentioned earlier, we're here at the U.S. National Field Meeting. We had a patient just yesterday that was talking to our team, and she was sharing that she wanted to wait for auto-injector because the prefilled syringe needle was something that she was a little nervous about. So it does provide value to patients, but it's not such a step forward that you should think of it as an accelerator in the way that the prefilled syringe was.

Your next question comes from the line of Akash Tewari from Jefferies.

This is Amy on for Akash. Maybe just a quick one on your 2 next-gen FcRns 124 and 213. Are you seeing an accelerated path to registrational study? And can you give us a sense of how you're thinking about the indication and then the size of these trials?

Yes. Thanks for the question and the interest in our future portfolio. Maybe I can start. The way that we think about our leadership of FcRn over the coming decades is that we know there is a lot of opportunity for FcRn, in fact, probably more than we can explore with VYVGART alone. And so we see the opportunity of having 2 next-generation molecules as opening up the opportunity to provide a better patient experience in some of the indications we're already in, but also start to push the biology even further and expand the indications that we can -- that an FcRn is making a difference to patients. So I think that's the strategy that we're planning. We think each of the next-generation molecules brings -- will bring that benefit to patients. Thanks for the question.

Your next question comes from the line of Yaron Werber from TD Cowen.

Congrats on the ocular study. If you don't mind, maybe a couple of questions. For EMPASSION, you switched the primary endpoint to grip strength. In the previous study in ARDA, you gave us sort of the ranges of grip strength. So maybe help us understand how is it powered? Is it superiority sort of head-to-head? What's clinically meaningful? And then secondly, Karen, we have a huge confidence in you, and congrats on the role. Tim, we're just -- we continue to get questions on the timing. I know, obviously, Peter is retiring as Chair. So maybe give us a little bit of a sense what drove your decision to kind of step up the chair.

Thanks for the questions, Yaron. I'll hand it over to Luc first to talk about EMPASSION. And then, Tim, maybe you can take the follow-up question.

Yes. So in fact, this is a story of growing insights in data as they matured. As we looked at ARDA and ARDA plus, so the Phase IIs, the signal we saw in grip strength gave us increasing confidence that this is really a real and patient-relevant outcome with an increasing separation over time or improvement over time, which in these patients was not seen before. And that's ultimately why in discussion with agency, we started utilizing this endpoint as the primary. You asked about superiority. The study is set up as a non-inferiority study, but with a prespecified option that if noninferiority is met, that we can formally test superiority. The data will ultimately drive that [ tree ].

Thank you, Luc. And Tim?

Thank you for the question. I think we're doing this transition out of a position of strength. I think now is the time to do the transition because the business and the organization is in a very healthy and a very strong state. You have seen the pipeline. You know the profitability, which we achieved during the course of last year, very strong foundation of the business. Also from an internal candidate point of view, we are ready. Karen knows the innovation playbook. She's a very strong carrier of the culture of the company, and she's ready to help us scale into our future because she know new therapeutic areas will come on back relatively soon. So consider this as a proactive move based on a position of strength. Thanks for the question.

Your next question comes from the line of Thomas Smith from Leerink Partners.

I was just wondering if you could provide a bit more color on the Phase IIa results for adimanebart in ALS. Obviously, really difficult indication, very complex biology. But just wondering if there are any learnings from this study that could be applied to the Phase III CMS program or potentially other indications.

Yes, I'll let Luc comment on the data.

Yes. Thanks for that question. Evidently not an outcome we were hoping for. We felt we had the moral obligation to explore ALS as an indication given our mode of action, trying to -- in this disease where there's very, very limited treatment options to see if we could move the dial. From our POC, the data, unfortunately, don't supports progressing, but we learned a lot, not in the least about how novel endpoints could be used, and we hope to share that knowledge with the field. With respect to impact and learnings on CMS, the context of treatment is fundamentally different. And CMS is directly in the biology of this molecule with the DOK-7 and other mutations affecting the mask receptor. And so that's a much more direct application of this molecule. So we don't think there's a read-through. And on our SMA program, likewise, there is a backdrop of approved treatments. The gene therapies are very well established. And we are going to evaluate whether we can have an add-on efficacy there, which is a different situation than ALS altogether.

Your next question comes from the line of Rajan Sharma from Goldman Sachs.

I had just a question on VYVGART growth dynamics through 2026. So just thinking about kind of the underlying growth outside of potential new indications, how should we think about growth across the various formulations of the drug? And if you could maybe just comment on competitive dynamics. I realize there's been a recent new approval in myasthenia gravis. Could you just talk to your confidence in the VYVGART profile and to what extent you think you may be impacted by that emerging competition?

Great. Thanks for the question. What -- I'll provide just one comment, which is one of the things that I think is incredible 5 years out from launch for VYVGART is that what we're seeing is continued growth across all indications, all geographies and all product presentations. And I think that's a sign that there's space for all of the different product presentations, and it's important that we're bringing those innovations. But Sandrine, maybe I can hand over to you to talk about the growth outlook for MG and CIDP.

Yes. Thank you, Karen. And I can maybe also help answer the question on the competition but that was a second question. So I think for MG, I mean, we have seen an amazing growth year-on-year. And we have, as I mentioned earlier, healthy fundamentals. I mean, our product, VYVGART is being used earlier and earlier. I mean, as I mentioned in the opening, 70% actually are coming from orals. And then on VYVGART, when you have 10 patients coming on biologics, 6 of them are actually starting with VYVGART. So this shows that this is the molecule that patients start on when they are starting on biologics. PFS is the one that has been driving and helping us drive strong growth last year. And as Karen just mentioned, we expect to continue to grow across all mode of administration, including PFS. And then the label expansion, of course, is going to help us this year, starting with seronegative. If you look at CIDP, I mean, we have -- we are still early in launch. So we have launched roughly 1.5 years ago, and we are still have a lot of room within the 12,000 patients that are not fully well managed. And beyond that, we are working very, very hard to lift any challenges either with payers or the inertia of prescribers to start earlier with VYVGART. So overall, very strong dynamics expected for this year like we had in the prior years. So now going to your question on the competition. Actually, we welcome competition. For me, this is -- and for us, this is a sign of progress, and this is a sign of innovation, and that's great for patients to have multiple options. This expands the overall market and VYVGART benefits from a market expansions. I just mentioned that 6 out of 10 patients starting on biologics go on VYVGART. So the more the market expands, the better it is for us. And as we are a data-driven company, all the data we have generated support our confidence that VYVGART profile will help us continue leading that category and remain the #1 prescribed biologics in MG from an efficacy viewpoint, and we are the only one that can really show the strong MSE, the robust safety that fosters earlier use, the ability to meaningfully reduce steroids and then as we mentioned, multiple flexibility on either IV subcutaneous or PFS. So when you take that all together, I mean, we believe that we have a very, very strong profile for continuing our leadership there.

Great. Thanks, Sandrine.

[Operator Instructions] Your next question comes from the line of Sean Laaman from Morgan Stanley.

This is Morgan on for Sean. Maybe one on the financials. So with VYVGART delivering $4.2 billion this year in net sales and 90% year-over-year growth resulting in the first year of operating profitability. How should we think about the sustainability of this growth profile as penetration deepens in MG and CIDP throughout this year and next year?

Yes. Thanks for the question. Karl, maybe you want to talk about the growth profile?

Yes. I think what we're building here is a long-term sustainable business, as Sandrine already mentioned, we see a lot of growth in MG and CIDP going forward. And the way we look at the financials long term is that revenue growth should exceed OpEx growth, which basically will return operating margins, which will increase over time. That in itself, of course, is not the objective of the company. We have very clear capital allocation priorities, and we're executing on those priorities. But what we should see is that we're going to build on our very strong balance sheet. We currently have $4.4 billion of cash in the bank. And going forward, that number should increase. So I think you can look forward to a long-term sustainable and profitable business. Thank you for your question, Morgan.

Your next question comes from the line of Sophia Graeff Buhl Nielsen from JPMorgan.

So just on the Phase III readout for VYVGART in myositis, could you clarify, would you have data to support approval by subgroup? Or will this largely be dependent on the overall data? I think you've been very clear on that the high unmet need within IMNM and the large patient population that could be addressed there and also the heterogeneity within DM. Given these dynamics, would you see these as relatively equally sized commercial opportunities despite the differences in addressable TAMs you've highlighted?

Yes. Thanks for the question. Maybe, Luc, you can talk to the basket trial and our approach, and then I can comment on the commercial opportunity.

Yes. So the Phase III setup is indeed that we can make statements on all 3 subsets. And of course, the ultimate reflection of that in label will be connecting the data with the regulatory discussion. But in principle, all 3 could be in scope.

Thank you, Luc. And then in terms of the commercial opportunity, the way I think about it, I mean, the total myositis population that we're studying, we think about in terms of it being an MG-like opportunity. But obviously, there are other subtypes. And I like to think about the 2 bookends of the subtypes. So we talked -- you mentioned IMNM. So IMNM, there are no other approved treatment options. There's about 20,000 IMNM patients. So what you can imagine there is that from a commercial perspective, you could imagine that we'll be able to gain a high portion of those patients because there are no other treatment options and the biology is so clear. On the other end of the spectrum, you can think of DM. There are more patients in DM, but it's also more heterogeneous in dermatomyositis. There's also more innovation coming to the dermatomyositis space. So that will grow that patient population. Innovation is good for patients. And I think let's see the data, how it reads out, but I think we should have a good value proposition to be able to compete in that population if the data reads out. So overall, total population MG-like, but the subgroups provide quite different dynamics from a commercial perspective. Thanks for the question.

Your next question comes from the line of Suzanne van Voorthuizen from Kempen.

It's one on empa and MMN in particular. There was a change in the dosing regimen between the Phase II and III and the Phase III is also head-to-head. Could you elaborate on how you navigate the potential risks that these 2 changes introduce? What gives you comfort that the study can confirm empa's non-inferiority? And I'm also wondering if you can give some color on how you went about setting the non-inferiority margin in this progressive disease?

Thank you. I think that's for you, Luc.

Yes. Thanks for that question. And I can tell you a lot of thought went into that based on the data again from ARDA, where we tested multiple regimens, and we're able to model and look at an exposure response relationship, which ultimately made us choose the dose regimen we went for. In terms of then choosing or choosing to go head-to-head, here, the thinking was if we were taking placebo-controlled study, we could have a lot of events because people on placebo in this progressive disease, as you say, will need rescue. And therefore, we said, well, why not just do them straight head-to-head? So that was that decision. The second one, how do you determine a non-inferiority margin? And this is actually also where the data on grip strength come in because the only available data on IVIg are on grip strength. So that's why we use that measure to determine the non-inferiority margin. Given the data we see from ARDA, one of the features that is different is that we continuously seem to improve grip strength, something which is not seen in the experience with IVIg. And that gives us confidence that we can at least meet but hopefully beat IVIg.

That's great. Thanks, Luc. And when you zoom out, I think what you can see with your answer is the approach that we take for -- with our programs, strong biology rationale, derisking with a Phase II. And I think we're well positioned for success commercially with this head-to-head data that in the way that you've laid it out. So look forward to that data in Q4. Thanks, Luc.

Your next question comes from the line of Allison Bratzel from Piper Sandler.

Just a follow-up on ocular MG and the potential for early treatment with VYVGART to prevent progression to generalized disease. Is that something you're able to capture in Part B of the oculus trial? Or just how long of a follow-up do you need to confidently be able to make that claim? Just any more color there would be appreciated.

Yes. Thanks for that question to allow me again to go on one of my favorite topics, which is can we slow MG progression. So the open-label extension following Stage B, which we call Stage B, is going to give us over 2 years of data, which if you look at extent epidemiological data, et cetera, should give us enough window to capture these people progressing and whether or not it's to the rate that's there in the outside world. The caveat, of course, is this is noncontrolled data. So any expression of this delaying might have to be in a publication or if the real-world evidence is deemed strong enough in a discussion with the agency.

Yes. I think that's what's exciting about this data, along with some of the other evidence generation that we're doing, a Phase IV study in early disease to be able to see that progression. But I think regardless, one thing that's important is with ocular MG is the symptom burden is significant and the opportunity to transform lives of patients suffering from ocular MG is significant even without the disease progression. So I think we can demonstrate that benefit in the short and the long term. Thanks, Luc.

Your next question comes from the line of Luca Issi from RBC Capital.

Congrats on the progress. Maybe, Luc, if I could circle back on ocular myasthenia gravis here. Again, I appreciate this is a fresh off the press, but how should we think about the kind of clinical significance of the data here, again, in the context of the p-value of 0.012. And then maybe related to it, can you confirm the use of steroids or other therapy was relatively well balanced between the 2 arms, so we can kind of definitively say that the benefit here is coming from VYVGART and is not confounded by any other therapies?

Yes. Thanks for that question. And of course, we don't share too many detailed data because we want to make sure that the representation in an external conference isn't impacted by doing so. But to come back to the -- yes, we have significant p-value, but that was driven by, in our mind, a very relevant treatment difference between active and placebo. Remember, these endpoints range is between 0 to 18 and to show an active 4-point difference for that individual patient is certainly a relevant outcome. So we feel that in totality, this is a meaningful signal that we have shown. And with respect to balancing on steroids, steroids were allowed but had to be stable. And we are confident that there's no imbalance in the outcome based on anything there.

And maybe just to add to your question on clinical significance. I mean, Luc mentioned in the script, what -- when you think about what the impact that ocular MG has, what patients will tell you is that it strips them of their independence. They lose -- because of the double vision, they lose the ability to drive, they lose the ability to work. And so it has a real impact on their quality of life. So there's no other treatments available other than steroids. So any benefit that we can provide and certainly this a 4-point benefit that we've seen is demonstrable benefit for patients and I think clinically very meaningful.

Your next question comes from the line of Justin Smith from Bernstein.

Just a very quick one, if you could talk about the commentary with regards to switching off subcutaneous Ig on to VYVGART and how that's changed over the last 3 months?

Yes, I'm happy to. Well, I think what you're asking about is there was an -- FDA looking into real-world evidence around switching and CIDP worsening. Actually, we had good news that we have completed that review and the label has been updated with some helpful guidance to HCPs around when switching from IVIg to VYVGART. So I think we're well positioned moving forward. That label update reinforces what we knew from ADHERE and reinforces the risk-benefit profile of VYVGART. Thanks for the question.

Your next question comes from the line of Samantha Semenkow from Citi.

Just one on the ocular MG opportunity. I'm wondering, can you speak to the mix of treating physicians that you're expecting for this patient population? Are they mainly managed by neurologists, ophthalmologists or even neuro-ophthalmologists? And I'm wondering how much education you think you need on the opportunity to drive VYVGART utilization in this segment?

Yes. Thanks for the question. Maybe, Sandrine, you can talk about that and also related to seronegative because we have the PDUFA date coming up in May. And just is there -- are there any changes for our field or the targeting strategy with this label -- with these potential label expansions?

That's a great question. Actually, we have a big overlap between the current prescribers and the target group we are visiting and the people that will be prescribing for MG in both seronegative and ocular. So it's mostly a neurologist-driven disease. So we don't expect to have to change our footprint. And actually, we increased our footprint early 2024. If you remember, we doubled our footprint to be able to not only target academic medical centers, but then to also be able to visit the community neurologists where we feel the majority of the patients are being taken care of. So you won't see a change of our approach there. And with the big overlap, we're confident we can target the majority of the potential and the prescribers.

Your next question comes from the line of Victor Floch from BNP Paribas.

One question on ARGX-213. So I believe the last time you've updated us on time lines where you were pointing out Phase I results sometimes in H1 this year. So I was just wondering whether we should expect you to discuss those data or to a broader extent, your -- like the development program of that product later this year.

Yes. Thanks for the question. And again, the interest in our next-gen. We are excited. So we're moving forward with 213, and we've shared that update previously, and it is in the clinic. We're working on the indication strategy at the moment and our path forward, and we'll certainly share that when we have an update to share. Thanks for the question.

And our final question today comes from the line of Douglas Tsao from H.C. Wainwright.

Just on oMG as a follow-up, we have heard from clinicians who have tried to use it in patients presenting with ocular symptoms, but they've had pushback from payers just given the fact it wasn't sort of on label. I'm just curious if you could provide some perspective on when you think it might start to become a contributor? Will it be sort of getting it added to the label? Or will there be a process where you need to also then talk to payers? Just sort of trying to understand the sequencing when we should think about this because it does seem to be a fairly meaningful commercial opportunity for you.

Yes. Thank you. And I agree it is a meaningful opportunity and a meaningful benefit for patients. So what you can expect, I mean, we'll file as soon as we can based on this data, and I think we have a well-oiled machine. So we'll do that as soon as possible, and then we'll see when the PDUFA date is, assuming the submission is accepted by the FDA. What we normally guide to is because we will need to have conversations with payers, and we will need to change those contracts. What we usually guide to is that it takes about 2 quarters after approval to get those payer policies in place and to really start to see the impact of the opportunity. So we'll take it step by step. And step number one will be preparing the filing as quickly as possible. Thank you.

And this concludes today's conference call. We thank you for your participation. You may now disconnect.