Argenx is Friday's IBD Stock Of The Day. The highly rated biotech stock is climbing the right side of a cup base on enthusiasm for its drug, Vyvgart.
Vyvgart treats an autoimmune condition called generalized myasthenia gravis (gMG). In this condition, patients experience muscle weakness.
On Friday, a panel of advisors to the European Commission recommended full approval for an under-the-skin version of Vyvgart. This would allow Vyvgart to be used on top of a standard treatment for adult patients with generalized myasthenia gravis.
On today's stock market, the biotech stock rose 0.9% to close at 527.98.
Biotech Stock: Expanding Vyvgart Uses
Argenx is working hard to expand the countries where Vyvgart is approved.
The European decision is based on a Phase 3 study showing an under-the-skin injection of Vyvgart is not inferior to the more traditional intravenous infusion after 29 days. Generalized myasthenia gravis is characterized by heightened levels of a problematic protein. On average, the under-the-skin injection cut down on that protein by 66.4% compared with a 62.2% reduction for the intravenous infusion.
"Our mission is to transform the treatment of severe autoimmune disease, and we remain committed to providing gMG patients a second innovation that could further address treatment burden," company executive Anant Murthy said in a written statement. Murthy is Argenx's general manager for Europe, Middle East and Africa.
Vyvgart is Argenx's only product. But the company says Vyvgart could treat a host of diseases in which the increased protein is a contributing factor. In the second quarter, Vyvgart brought in $269 million in sales, surging 260% year over year. The company also launched the under-the-skin injection, known as Vyvgart Hytrulo, in the U.S. this summer.
It's important to note, Argenx isn't profitable. In fact, analysts following the biotech stock still expect the company to report losses this year and next. But sales growth is strong. This year, analysts expect Argenx to report $1.16 billion in sales, up 160%. Next year, analysts expect sales to jump 42% to $1.64 billion, according to FactSet.
Data Readouts Coming Up
Now, the biotech stock is forming a cup base with a buy point at 550.76, MarketSmith.com shows.
Shares have traded well above their 50-day moving average since mid-July. On July 17, Argenx stock rose definitively above that key line — skyrocketing almost 28% — after Vyvgart Hytrulo showed promise in patients with chronic inflammatory demyelinating polyneuropathy, or CIDP. This is a neurological disease that causes progressive weakness and reduced senses in the arms and legs.
Following the second-quarter report, Leerink Partners analyst Thomas Smith noted Argenx has plenty of key data readouts in the fourth quarter that could drive the biotech stock higher.
"Overall, we remain confident in Argenx's strong commercial and clinical execution, and expect that multiple upcoming pivotal data sets in the fourth quarter will continue to drive meaningful fundamental value to Argenx shares as well as increased perception of optionality," he said in a July 27 report.
Smith raised his price target to 585 from 550 and kept his outperform rating on the biotech stock.
Further, ARGX stock is on the IBD 50 and Leaderboard stock lists.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
