Argenx stock crashed early Wednesday after its treatment for an autoimmune disease that causes skin blisters flopped in a Phase 3 study.
The company pitted its under-the-skin shot, Vyvgart Hytrulo, against a placebo in patients with forms of pemphigus, a skin-blistering disorder. All patients received corticosteroids. But those steroids also lowered the culprit autoantibodies responsible for pemphigus for placebo recipients.
Now, Argenx has scrapped testing Vyvgart Hytrulo in pemphigus and is delaying a decision on whether to study the drug in a similar disease called bullous pemphigoid. This marks the second failure in as many months for Vyvgart Hytrulo in an autoimmune disease.
On today's stock market, Argenx stock plunged 25.1% to 338.91. That signaled a gap below the 200-day moving average and pushed shares to at least a nine-month low, according to MarketSmith.com.
Shares of Immunovant, which has some rival drugs, tumbled 12.8%, closing at 36.18 and undercutting a buy point at 40.94 out of a cup-with-handle base as well as its 50-day line.
Argenx Stock Suffers Another Setback
The drug worked as expected. It lowered the levels of the autoantibodies that cause pemphigus by 75%. But the corticosteroids led to an outsized impact in the placebo group. Autoantibody levels in those patients declined by 70%.
As a result, 35.5% of patients who received Vyvgart Hytrulo entered remission. But, so too did 30.3% of placebo recipients.
Leerink Partners analyst Thomas Smith has expected $716 million in worldwide sales of Vyvgart Hytrulo in pemphigus treatment. He's also projected $1.6 billion from the bullous pemphigoid market. Now, Argenx might not go after the latter, or it could alter its study design.
Smith kept his outperform rating on Argenx stock. But he noted the company's drug also failed to make a difference last month in a study of patients with primary immune thrombocytopenia, a platelet-depleting disorder.
"We expect pressure on Argenx shares today, exceeding the fundamental value of pemphigus and bullous pemphigoid in our model (about 12% of our price target), as this study marks the second consecutive clinical setback, following the recent failure in primary immune thrombocytopenia in November," he said in a report.
Argenx stock hit a record high at 550.76 in mid-July, but has since pulled back roughly 18% as of Tuesday's close.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
