Argenx topped second-quarter financial expectations early Thursday, reporting a better-than-expected loss with revenue ballooning thanks to its Vyvgart drug. But ARGX edged down Thursday.
The Netherlands-based biotechnology firm reported a loss of $1.69 per share in the second quarter, down from a loss of $3.81 a year ago. Meanwhile, the company reported revenue ballooning 231% to $281 million.
Wall Street predicted a loss of $1.71 per share and sales of $257 million. Argenx now has a string of eight consecutive quarterly losses, dating back to the second quarter of 2021.
Analysts expect the company turning a yearly profit for the first time in 2025. After that, Wall Street predicts earnings will skyrocket, hitting $49.32 a share by 2028, according to FactSet.
Argenx stock shed 2.3% to close at 509.05 Thursday during market trade. On Wednesday, shares shed 0.9% to 520.99. ARGX has gained around 40% in 2023 and was recently added to the IBD 50 list.
Vyvgart Sales Balloon
The company is breaking into the multibillion-dollar market for chronic inflammatory demyelinating polyneuropathy, or CIDP. This neurological disorder leads to progressive weakness in the arms and legs.
Argenx's fate lies in its only product, the drug Vyvgart Hytrulo, which treats generalized myasthenia gravis, an autoimmune disease that causes weakness in the skeletal muscles. The Food and Drug Administration gave approval to Vyvgart in late 2021. Since then, sales have beaten expectations every quarter.
Argenx reported Thursday that sales of Vyvgart in the second quarter totaled $269 million, up 260% vs. the year-earlier period. In the first half of 2023, Vyvgart sales grew 400% to $487.3 million.
The company confirmed Thursday Vyvgart Hytrulo is now available in the U.S. with the first shipment of vials going out in July. Argenx added it has launched Vyvgart in Italy following successful completion of reimbursement negotiations.
The biotech firm expects a Vyvgart approval decision in Canada during the third quarter.
Argenx Stock Breaks Out
On July 17, Argenx beat Wall Street's expectations in a study of patients with a progressive nerve disorder.
Over the 48-week study, patients who received Argenx's Vyvgart Hytrulo had a 61% reduction in the risk of relapse vs. placebo recipients. Halfway through, 26% of Vyvgart patients relapsed compared with 54% of placebo patients. At the end the study, the relapse rates were 34% and 60%, respectively.
On the news, ARGX shares soared 27.8% to close at 484.43, hitting their highest ever point. Argenx stock broke out of a flat base with a buy point at 423.99, according to MarketSmith.
The FDA approved a subcutaneous shot of Vyvgart in June. Before the approval, Vyvgart had been given via intravenous infusion.
Subcutaneous shots are an easier and quicker means of administering drugs. FDA approval also enhances Vyvgart's competitive profile against similar drugs like AstraZeneca's Ultomiris.
On Monday, UBS analyst Xian Deng downgraded Argenx stock to neutral, but raised his price target on Argenx stock to 570, up from 480.
"Even though we believe commercial uncertainties still remain for CIDP after positive data, this does not change our positive view on the megabuster potential of Vyvgart," Deng wrote in a note to clients. UBS models $10 billion in peak sales for Vyvgart.
Merger And Acquisition Target?
Enthusiasm for Vyvgart is driving Argenx stock with biotech observers calling the drug a "pipeline in a product."
Shares hit a record high on May 17 after Bloomberg reported Argenx could be the next biotech buyout target.
The health care space has seen a spree of biotech takeovers as Big Pharma looks to replenish its pipeline ahead of a patent cliff. Pharmaceutical companies also are sitting on hoards of cash, while biotech valuations have taken a hit.
Argenx has long been presumed an acquisition target for Pfizer, Reuters reported on July 17.
Deng wrote Monday that conversations with investors "suggest the market is potentially pricing in M&A interest, especially as recent news flow cited (that) takeover interest is expected after CIDP results."
Argenx stock has a 90 Composite Rating of 99. ARGX shares have a 92 Relative Strength Rating and a 67 EPS Rating.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
YOU MAY ALSO LIKE:
Get An Edge In The Stock Market With IBD Digital
Labor Unions Keep The Heat On Starbucks And Amazon
