Argenx SE, a $35 billion biotech company listed on NASDAQ and Belgium’s BEL 20, has seen its stock value surge in recent months. The company boasts a commercialized multi-blockbuster drug, Cusatke, and several late-stage candidates in its pipeline.
Analyst Optimism
Guggenheim analysts are bullish on ARGX shares, assigning a price target of $1,065—nearly double their current value of around $573 per share. The analysts estimate that upcoming Phase 2 and Phase 3 readouts for ARGX’s treatments could be successful, with success probabilities ranging from 70% to 90%.
Strategic Developments
The optimism surrounding Argenx is not new. In February, Bloomberg reported that the company engaged JPMorgan Chase & Co. to explore strategic options, including a possible sale, after releasing positive Phase 3 data for CIDP treatment Vyngrat. Vyngrat is expected to generate peak sales of between $4 billion and $5 billion annually, significantly contributing to the increased valuation of Argenx shares.
"We believe that the upcoming Phase 2 and Phase 3 readouts for our treatments could be successful," said an analyst at Guggenheim regarding their assigned price target for ARGX shares.
Company Background
Founded by Belgian entrepreneur Vincent Brichard in his garage over two decades ago, Argenx now sits atop NASDAQ as one of just three European companies valued above $35 billion, alongside Roche Holding AG.
In February, Bloomberg also reported that Michael Castor, founder of Argentum Capital Partners, had been hired as an adviser by Brichard. Castor had previously served as CEO of Argenx.
Vyngrat’s Market Potential
Vyngrat, which targets chronic inflammatory demyelinating polyneuropathy (CIDP), is expected to generate peak sales between $4 billion and $5 billion annually. The treatment received approval from European regulators, making it available across all EU member states, and was also approved in Japan.
CIDP Overview
CIDP affects nerves outside the brain, causing symptoms such as:
- Weakness
- Numbness
- Pain
- Tingling
- Burning sensations
- Loss of coordination and balance
Early diagnosis and appropriate medical intervention are crucial for determining patient outcomes.
Financial Performance
Guggenheim analysts have assigned an additional price target of $1,065 per share based on their belief that upcoming Phase II/III readouts will show success rates ranging between 70% and 90%. They estimate Argenx’s total addressable market size at approximately $28.7 trillion worldwide over the next ten years, although actual numbers may vary due to various factors.
Argenx’s commercialized product, Cusatke, generated net sales totaling $900 million during the first quarter of 2023, compared to $950 million in the same period the previous year. Operating income fell short of expectations, reaching $86 million, down from $97 million in the fourth quarter of 2022. However, gross margin expanded to 81.8%, up from 66% in the previous quarter.
Ongoing Development and Future Prospects
On June 30, Argenx announced results from an open-label extension study evaluating the safety and efficacy of Cusatke administered subcutaneously once weekly over 40 weeks. The findings showed no new safety signals or serious adverse events, supporting the continued long-term use of Cusatke.
Guggenheim analysts believe Argenx’s cash position should remain strong enough to support ongoing development efforts, even in a worst-case scenario where no future milestone payments are received.
Overall, Argenx appears poised to capitalize on growing demand in emerging markets, particularly in:
- China
- Japan
- South Korea
- India
- Southeast Asia
- Latin America
- The Middle East
- Africa
- Europe
- North America
Investors are encouraged to consider Argenx as a promising opportunity, with significant growth potential in the coming years.
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