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Text | Amino Observation

Violent aesthetics are not uncommon in the field of innovative drugs. The latest example is Argenx.

When Argenx was first listed in 2017, its market value was only about $1 billion; today, its latest market value has reached $27.5 billion. Considering its pre-market surge today, its market value is very likely to exceed $30 billion.

The changes in revenue and profit well explain the growth of Argenx's market value.

In 2021, the company's first product, Agamod, won in the field of myasthenia gravis and was approved for marketing by the FDA.

In 2022, the full year of Agamod's first indication on the market, sales exceeded US$400 million; in 2023, this figure increased to US$1.2 billion.

The latest financial report once again refreshed the market's perception: in the first half of 2024, the company's sales revenue reached US$875 million, almost doubling year-on-year.

In terms of losses, the company's losses were US$436 million in the first half of 2022, which narrowed to US$123 million in 2023, and further narrowed to US$33 million in the first half of 2024.

In fact, if we only look at a single quarter, the company has already made a profit of more than $30 million in the second quarter. This means that in 2024, Argenx is expected to achieve full-year profitability with its products.

From market value, revenue to net profit, Argenx is interpreting the aesthetics of violence. Of course, behind this is also a story of long-term forbearance and dormancy. As a biotech company founded in 2008, its explosive growth period did not come until ten years later.

This also reflects the objective law of the growth of biotech companies. Any biotech that achieves leapfrog development, as opposed to violent aesthetics, is always a victory of long-termism.

The domestic innovative drug industry will also follow this rule. Since the drastic reforms, the industry is still very young. At present, although most companies may perform poorly, this may be to some extent because their golden age has not yet arrived.

/ 01/ Waiting for the outbreak after ten years

The name Argenx is inspired by the "Argonauts" in ancient Greek mythology. In the story of the Argonauts, it is described how dozens of heroes completed a seemingly impossible task through teamwork.

Although it seems that Argenx has accomplished the impossible task now, its development history shows that the interpretation of violent aesthetics has also experienced a long period of dormancy.

Argenx was founded in the Netherlands in 2008 with the goal of transforming breakthroughs in immunology into a new antibody-based drug pipeline. Throughout its development, the company has also experienced many failed explorations.

From the initial IL-6 antibody Gerilimzumab, to the CD70 antibody ARGX-110, to the c-Met antibody RGX-111, Argenx has developed numerous pipelines.

Its first product, Agamod, actually entered clinical trials for the first time in 2014, six years after Argenx was founded.

In 2020, Agamod achieved success in the Phase III clinical study of myasthenia gravis, and began to make the market full of expectations; in 2021, Agamod won in the field of myasthenia gravis and obtained FDA approval for marketing, starting its road to counterattack.

Although the research and development process of Agamod was relatively smooth without major setbacks, the market's recognition of Argenx was not high before the core data was released.

When Argenx first went public in 2017, its market value was only about $1 billion, which was not prominent in the U.S. stock market. At that time, in the biotech industry under the capital boom, the market value of many biotech companies easily reached $5 billion or even $10 billion.

But just like a marathon race, as positive data from Agamode continued to be released, Argenx, which had been lagging behind, suddenly accelerated and surpassed many competitors in the second half of the race.

/ 02/ Victory of technology and strategy

Of course, the rise of pharmaceutical companies does not rely solely on endurance and physical strength. Even the simplest business stories have their essential laws behind them. The core of Argenx's success is inseparable from technological innovation and wise strategic planning.

The antibody drug technology platform developed by the company, such as SIMPLE Antibody, has potential advantages such as extending the half-life of antibodies, increasing tissue penetration, and improving disease target rate, which makes it possible to develop drugs with "increased efficacy and reduced toxicity". These advantages enable Argenx to continue to experiment in multiple therapeutic areas.

At the same time, the correct strategic choice can avoid many troubles for the company and the team to a certain extent, and indirectly remove some obstacles on the road to innovation.

Specifically, the indication layout strategy of Agamod can be said to be "picking the soft persimmon", that is, choosing those areas where the standard treatments are relatively old and the treatment effects and safety are not ideal. Such a strategy reduces the resistance to subsequent clinical development and commercialization.

The most typical indication is myasthenia gravis. Before Agamod, there had been no new breakthroughs in this field for nearly 30 years, and the core treatment methods were roughly:

Cholinesterase inhibitors are used for initial relief, followed by combination therapy with glucocorticoids for subsequent exacerbations, and rescue treatments such as intravenous immunoglobulin and plasma exchange.

Although cholinesterase inhibitors are effective, their effects are short-lived and only work for about 80% of patients, and usually need to be combined with immunotherapy. Immunosuppressants, whether hormonal or non-hormonal, have major safety issues, resulting in treatment effects that are far from meeting patient needs.

Agamod provides a new treatment option. According to its Phase III clinical data, compared with existing drugs, Agamod has comprehensive advantages such as a wide range of applicable populations, significant efficacy, rapid onset of action, and high safety. Therefore, Agamod can quickly gain wide application in the field of myasthenia gravis.

A similar situation also occurs in the indication of chronic inflammatory demyelinating polyradiculoneuropathy (CIDP). The etiology of CIDP is still unclear, and it is speculated that it may be related to abnormal cellular immunity and humoral immunity. The treatment methods are limited, mainly relying on IVIg, plasma exchange (PLEX) and glucocorticoids for induction and maintenance treatment.

However, IVIg and PLEX are limited in accessibility and convenience, and the side effects of glucocorticoids are also obvious, resulting in the treatment needs of CIDP being far from met. More effective and safe alternative treatment options are urgently needed.

The successful approval of Agamod for the treatment of CIDP provides new hope for CIDP patients to improve symptoms and stabilize disease progression.

It can be said that Argenx's success is not only the result of technological innovation, but also a victory of strategic choice. An innovative pharmaceutical company can only succeed in the market if it targets real needs and uses technology to bring more effective products.

/ 03/ The story is not over yet

For now, the Argenx story continues.

First, the market expansion of Agamod has just begun. At present, Agamod has been approved for the treatment of three indications: gMG worldwide, ITP (primary immune thrombocytopenia) in Japan, and CIDP (chronic inflammatory demyelinating polyradiculoneuropathy) in the United States. Considering that the CIDP indication was only approved in June, it is expected to continue to bring new growth in the future.

Secondly, the exploration of the indications of Agamod has not yet ended. Currently, Agamod is being developed for 15 indications. If new indications are approved in the future, it will contribute new growth momentum to the company.

In addition, Argenx is also accelerating the development of other pipelines. For example, the company is advancing the research of its first C2 inhibitor empasiprubart, which is currently being evaluated for MMN (multifocal motor neuropathy), DGF (delayed graft function), DM (dermatomyositis) and CIDP.

The company is also evaluating ARGX-119, a muscle-specific kinase (MuSK) agonist, for the treatment of CMS (congenital myasthenic syndrome) and ALS (amyotrophic lateral sclerosis).

At its R&D Day on July 16, Argenx announced its "Vision 2030," which includes 50,000 patients worldwide being treated with Argenx's drugs, 10 approved indications, and five new molecules in Phase III development.

Although it is still unknown whether this vision can be realized, at least Argenx has the ability to generate its own blood, the ability to carry out target-based layout, and the ability to take itself to a new level. In other words, Argenx's rapid growth will continue.

The rise of Argenx also conveys a simple truth to the market: the rise of biotech companies often follows a leapfrog development path - from 0 to 1, from 1 to 10, from 10 to 50... the growth rate will become faster and faster.

Although we cannot predict how long it will take from 0 to 1, once the breakthrough is achieved, we will be able to stage a rapidly growing violent aesthetic.

Therefore, patience is essential for everyone.