Q2 2025 argenx SE Earnings Call
Good morning, My name is Rob and I'll be your conference operator today I would like to welcome everyone to the call at this time all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you I'd now like to introduce best El Jocko, Vice President corporate communications and Investor relation.
You may begin your call.
Thank you our press release was issued earlier today with our half year 2025 financial results and second quarter business update. This can be found on our website along with the presentation for today's webcast before we begin on slide two I'd like to remind you that forward looking statements may be presented during this call may include.
Payments about our future expectations clinical development regulatory time line.
The success of our product candidates financial projections and upcoming milestones.
Results may differ materially from those indicated by these statements. Our Jackson is not under any obligation to update statements regarding the future or to conform those statements in relation to actual results unless required by law.
I'm joined on the call today by Tim been harboring Chief Executive Officer, Carl <unk>, Chief Financial Officer, and Karen Matthews, Chief Operating Officer, Luc Troy and Chief Medical Officer will be available during the Q&A I'll now turn the call over to Tim.
Thank you Beth and welcome everyone.
I'll begin on slide number three.
The vision 2030 is our roadmap for long term value creation.
And I am proud to say that we are exactly where we set out to be.
Over the past 12 months.
<unk> has achieved exceptional year over year growth of 97% across all of its approved indications.
We've also initiated multiple registrational trials in large market opportunities that chevron's mind scientists and T D.
And advanced four new molecules into our pipeline.
It sets us up to create significant growth with 10 labeled indications and the robust late stage pipeline by 2030.
While we are building for the long term.
Also delivering today.
15000 patients globally are now being treated with <unk>, including 2570 patients just one year into the launch.
We have seen growth across all indications formulations and region.
As expected our Prefilled syringe is already driving new patient starts and new prescriber demand.
This momentum is a direct result of our team's extraordinary execution.
I want to thank them for advancing innovation that truly matters to patients.
Kevin will share more later in the call on our commercial performance and the path to reach 50000 patients by 2030.
Well I want to focus today is on the opportunity we have to expand that gas broad potential and advance our pipeline of first in class assets.
Slide four.
We have the opportunity to create significant value in the near term with our three phase III pipeline assets.
We are building momentum at adapting them up in therapeutic areas beyond neurology.
We presented our phase two proof of concept results in mind sizes insurance for the first time in July.
And the reception from the Rheumatology community reminds me of the early enthusiasm we saw from neurologists when we first unveiled our Mg data.
Rheumatologists are beginning to see what a targeted approach like Africa, taking lot could mean for their patients.
Raising the treatment part beyond symptom management.
Sustained functional improvement.
In the mining side the study.
Thinking about delivered significant improvements in muscle strength as measured by the tests.
Which clinically minutes, what we saw pre clinically in our models <unk> models.
In the <unk> study, we observed meaningful improvement in systemic disease activity.
And <unk> is also advancing in two Registrational head to head studies versus IV AIG in element in CIP.
Our decision to run head to head studies illustrates our conviction that <unk> has the potential to disrupt these markets.
The phase two auto results in elements supported.
And recently gained significant attention from treating neurologists espns in may.
The data points that resonate most come from the patient global impression of change scale.
We're over 94% of treated patients.
And then.
And then the best on IV AIG.
Indicating tampa could provide a transformative benefit.
For IDP, we are seeing significant demand from the community from they've got high trullo, indicating that there is still a need for more innovation.
We're committed to making the broadest impact by advancing two distinct mechanisms of action with <unk> and <unk>.
Our journey from online is our third and most recent molecule to enter the Registrational study.
Boeing positive proof of biology data and CMS.
The discovery and development of our journey from online exemplifies our innovation model level.
We collaborated with the world's leading experts to design, an antibody that activates musk in a way that stabilizes and potentially enhance the neuromuscular junction.
In our 16 patient phase <unk> study, we observed consistent functional improvements across multiple endpoints.
And this is just the beginning for <unk> nine we have identified several opportunities across serology for this agonistic antibody.
Slide five.
Our immunology innovation platform continues to be a powerful engine for long term growth.
We are rapidly advancing four new molecules, including our IL six inhibitors.
Excellent blocker, and then Iga targeting antibody all of which are now in phase one studies.
These programs are part of our broader portfolio of over 20 active programs each targeting areas of high unmet need.
Our approach starts with identifying novel first in class immunology targets and building molecules that can address them.
As part of our investment in our IP. We are also expanding our toolbox to optimize our molecules to be best in class.
We recently announced a collaboration with natural products to gain access to that AI, driven micro cycle discovery platform.
Enabling the development of potent selective and orally available peptide against targets that we select.
This collaboration both expense our capabilities beyond antibodies and reinforces our commitment to continue to innovate on the patient experience.
I will now turn the call over to Carl to discuss our strong financial position, which remains a key lever for us in achieving our long term growth vision to scale efficiently and prioritize our investment in innovation.
Thank you Tim Slide six the second quarter 2025 financial results are detailed in this morning's press release.
Total operating income in the second quarter was $967 million.
This reflects $949 million in product net sales and $19 million in other operating income.
We are very proud of our 97% growth we have been able to deliver since this time last year.
Presenting the significant unmet need but exist in Mg and <unk> and the transformative outcomes with court can offer to patients.
On a quarter over quarter basis, we delivered 19% or $158 million in product net sales growth in second quarter compared to first quarter of this year.
If you look at the breakdown by region product net sales were $802 million in the U S $52 million in Japan $83 million across our rest of world markets, including Europe, Canada, and the outboard in their markets and $12 million.
Product supply design lab in China.
We are happy to share, but all global markets grew in the second quarter with the exception of our supply to China, which you'll remember is not reflective of demand and depends on when we ship with in the quarter.
We continued to expand <unk> reach in your non U S markets.
The overall contribution of these regions now represents more than 15% of global product net sales.
In the U S. Specifically, we delivered 18% quarter over quarter growth.
Reflects strong growth in both gmg and <unk> across all three presentations.
IV sub Q auto and the sub Q3 fold range.
We made the investment to move quickly with PFS, because we know it will be a long term growth enabler for all current and future indications.
We are already seeing this play out in the near term and PFS increased patient demand for both cohort one quarter into its launch.
With the introduction of PFS and the changing dynamics associated with Medicare part D. Redesign there was an increase in gross to net which we anticipated.
Gross to net went from 12% at the end of 'twenty 'twenty four to approximately 20% at the end of second quarter.
Importantly.
The net revenue contribution for our gmg patients in <unk> patient continues to be consistent with our previous guidance.
This means that going forward, even with the increase gross to net adjustments growth will be driven by our ability to broaden our patient reach within the Mg and <unk> markets and into new patient populations.
<unk> will help us to achieve this growth.
Next slide.
Total operating expenses in the second quarter of our $766 million, an increase of $98 million compared with tier. One. This includes a $49 million increase in SG&A and to $19 million increase in R&D all of which reflects.
Our commitment to deliver on our innovation mission in a disciplined way.
Cost of sales for the quarter is $111 million, which brings our year to date gross margin to 11%. We continued to make important investments into our global supply chain.
Our expansion strategy includes our commitment to manufacture in the region for the region and specifically to grow our capacity in the U S.
R&D and SG&A expenses for Q2 were $328 million and $325 million rich.
Respectively, leading to an operating profit $201 million forward over period.
The quarterly financial income is $38 million and we recorded $49 million of exchange gains mainly relate mainly resulting from our non U S dollar denominated cash balances.
Year to date effective tax rate is 15% after tax the profit for the quarter is $245 million and for the year to date is $415 million.
Our cash balance at the end of a quarter represented by cash cash equivalents and current financial assets is $3 9 billion. This is up from $3 4 billion as of the beginning over year, mainly driven by net cash flow from opera.
Writing activities.
Zero point $4 billion for the first half of the year I will now turn the call over to Karen who will provide details on the commercial front.
Thank you Kal slide eight.
At <unk> everything we do against the deep commitment to understanding and meeting patient needs.
They've got continues to be a transformative medicine raising about the patient of what they can achieve from their treatment in Mg we have the highest rate of minimal symptom expression across any treatment and in CIBC, we're seeing real world results that mirror, the adhere data including around functional improved.
<unk>.
This value proposition for patients support our position as the leading branded biologic in Mg in an increasingly competitive environment and that's exactly where we hope to go in <unk> as well.
Before diving into the success of the quarter I wanted to discuss the realized impact of our treatment.
Lynn a biomedical engineer and marathon runner with first diagnosis. The IDP when she was training for in Iron Man and noticed a strange tingling fingers.
As the IDP, Unfortunately progress notwithstanding treatment with IV <unk> and other therapies.
She maintained an active lifestyle and had been vocal about the challenges that come with managing the CIBC.
Recently, she switched they've got high school, a pre filled syringe, which he cited as an absolute game changer treatment experience.
She also sure that you've seen an overall improvement in the quality of life.
Recently for the first time in Aes, she didn't plan around a hospital schedule, while traveling outside the U S for three weeks.
And while every patient experience is different this is just one of the many inspiring stories we've heard throughout this launch.
Next slide.
The team delivered another phenomenal quarter and we saw we've got growing across all indications formulations and regions.
In the U S. The introduction of the pre filled syringe led to increased demand. So they've got with more patients initiating treatment across all <unk> got product presentation than we've seen in prior quarters.
50% of PFS patients were brand new they've got with the other switching from <unk> vial, albeit got IV.
We also see the PFS, expanding our prescriber base, which ultimately opened up our ability to reach new patients.
Over a thousand physicians have written the PFS prescription in the first quarter of launch with around 15% being first time prescribers at any <unk> got product presentation.
As with our prior launches early momentum has been enabled by our ability to secure access quickly with favorable policies as of this week, we executed policies, representing 70% of commercial lives.
Let's now look at the growth dynamics for Mg and see IDP.
Of which meaningfully contributed to the quarter's performance and have near term expansion opportunities.
Slide 10.
<unk> continues to gain momentum in Mg. It has now been 14 quarters since we launched they've got in Mg and 14 quarters of consistent growth.
Even though we believe we are still at the early stages of unlocking the full opportunity, which we estimate to be 60000 patients in the U S.
Our first priority is to shift the treatment paradigm moving the goalposts for patients and resetting expectations of water treatment can do it's no longer the pain control is being out of the hospital or being reliant on high doses of broad immunosuppressants, it's about being symptom free and getting back to the activity in love this shifted already underway.
60% of new patients because they have got come from Aro, reflecting the value they've got delivered to its consistent safety and efficacy.
Second we know that branded biologic still represent only 10% of the Mg market today, we see this expanding as more innovation in the market all of which sets to raise treatment expectations for patients we're focused on maintaining our position as the fastest growing biologic in this evolving landscape.
<unk> pre filled syringe will be critical to achieving both of these goals.
The PFS is expanding access to new Mg patient segment, particularly those we couldnt reach with HCP administration as the only option.
It's also emerging as a key differentiator to help us reach that additional 25000 patients as the total biologic adoption growth.
Lastly, we're also advancing registrational trials in seronegative, and ocular Mg, which together represent 18000 patients of that total addressable market and supports our goal of they've got having the broadest Mg label.
Slide 11.
Turning to <unk>, we continue to see consistent growth across all key patient and prescriber metrics. Besides a very successful launch.
As of the end of June over 2500 patients have been treated globally, we've got high Tula most of which are coming from the U S.
Launch in Japan, and Germany are also off to a fast start.
This momentum is driven by the clear unmet need and meaningful outcome driven by the safety and efficacy. We are seeing that they've got actual in the real world and now the added convenience of a pre filled syringe.
Importantly, we see significant room to continue to grow within our initial 12000 patient population and we believe the strong value proposition of <unk> actual will support continued expansion even beyond that over time.
We see tremendous opportunity ahead in MGMT IDP. We're just getting started these indications alone gives us a strong foundation for continued growth and we are applying the same playbook as we expand into new diseases, we're focusing on what matters, most generating meaningful data for patients moving rapidly and staying ahead of competition through innovation.
And with that I'll now turn the call back to Jim. Thank.
Thank you Karen.
We are executing across the business to transform the treatment landscape for patients with autoimmune diseases.
We have achieved in Mg and <unk> alone reflects the significant value, we have already unlocked and a substantial growth still ahead.
We are excited to build on our proven ability to translate innovation into commercial success as we enter new markets and the opportunity in front of us is expensive.
Over the next 18 months, we expect data from <unk> phase III and six phase II trials across our pipeline each with the potential to expand our reach into new patient populations and unlock addressable markets well beyond where we are today.
As we scale for the long term, we remain deeply committed to creating lasting value for our shareholders our partners and.
Most importantly, the patients we serve.
With that operator, we'll open the call up to questions.
Thank you we will now begin the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad to raise your hand, who joined the queue. If you would like to withdraw your question simply press Star one again.
Ask that you please limit yourself to one question only.
Our first question today comes from the line of Alex Thomson from Stifel. Your line is open.
Great Good morning, and thanks for taking my questions.
I guess really how of your cycles per year in Mg evolved as you've generated additional chronic dosing data from adapt next and with neurologists getting more comfortable with this idea of chronic ex CRD administration, I guess really what I'm asking is one of the drivers of the higher gross to net here outside of the part D exposure, a higher gross price per patient in <unk>.
Followed by greater discounting towards a consistent price. Thanks.
Thank you Alex for joining us on the call today, I would like to kick it off with Carlos answer to the second part of your question and then I really like what are you going and I would like to give that question part one of the question to Canada.
Thank you, Eric where net revenue per patient for Mg and <unk> remains consistent even with a higher gross to net.
There are many variables that go into wind into the net revenue per patient.
<unk> product mix less price gross to net utilization and at year end. It is fair to assume that the combination of these variables offsets the impact of gross to net.
And then also for the sake of clarity we want to confirm that we have not taken any price increase during 2025 in the U S. Overdue Karen Thanks, Paul Yes, and thanks for pointing out I mean, we had a really strong quarter in Mg and that was actually driven by patient adds is what I would suggest but we.
Can you guide to five cycles per year on average for an Mg patient, but what you're right to call out is it there is the potential for high utilization and adherence with high to low end, particularly with PFS because of the convenience you can imagine for patients that convenience of the PFS for self injection the other big driver.
And what you can imagine is that once a patient experiences MSC with they've got they wanted to stay in that in that minimum symptom expression.
That's the advantage of individualized dosing right. They can they can pick their dosing that keeps them in MSC and thats that positive experience that is keeping patients on they've got so those factors combined are really what led us to delivering what is remarkable I think it's 14 quarters straight.
Growth with Mg.
Great. Thank you.
Your next question comes from the line of <unk> Ahmad from Baird.
Bear with me one moment.
Our next question comes from the line of.
Eric <unk> from Wells Fargo. Your line is open.
Hey, good morning, and congrats on the update here and thanks for taking the questions. So.
Just one on the breakdown of the PFS switches between high school and IV I know you said that 60%.
Patients were new leaving 40% some switches, but what that breakdown look like thanks.
Hey, Eric Thanks for joining us on the call today and thank you for this discretion, which is really focusing in general.
Are we growing the market that the PFS instead of just switching in existing market right. Ken Yes, absolutely. So we don't provide the split by product presentation, but we've shared in previous quarters.
A few facts that are important <unk> is driving the majority of the growth. So they've got and as you rightly called out 50% of pre filled syringe patients on mute if they've got so our strategy with bringing these innovations to market in both Mg NC IDP is that we're looking to expand the market and <unk>.
Improve our differentiation in increasingly competitive markets.
That's exactly what we are seeing the pre filled syringe is delivering is that market growth our market expansion and product growth.
So.
You can expect that to continue I would say through the end of the year.
Thanks for the question.
Your next question comes from the line of our cash to worry from Jefferies. Your line is open.
Hey, thanks, so much so our high level math suggest youre gmg patient adds are really meaningfully growing I think went from 800 to something over 500 in Q2, how much of this was the prefilled syringe, allowing you to unlock new patients in an earlier line setting and it doesn't seem like you're necessarily cannibalizing from the IV.
And really what's the correct run rate assumption going forward.
And maybe just secondly on your stereo negative trial can you talk about your confidence on that study reading out well and why your primary endpoint for that trial, its absolute Mg ADL drop versus EMG responder endpoint you've used in the past. Thank you.
Yes, Thank you Rakesh and we have the benefit of selling our chief Medical officer here to David is on the call look so look we will give question due to you about the seronegative trial that let's kick it off with <unk>.
Yes, I think you rightly call out.
We had a very strong quarter in Mg and that was fueled by pre filled syringe as we expected expanding the market pre filled syringe allowed us to grow the prescriber base, we had a thousand prescribers full pre filled syringe in the quarter of 150 of those are new to <unk> got.
That's exactly what we thought would happen. So we're really pleased with the launch of pre filled syringe.
Delivering on what we thought it would deliver in.
In parallel to that we are continuing to see growth in our IV business in Mg and Thats because there is a place in the market with certain.
Certain prescribers and patients prefer the IV option and that's in line with our strategy that we want to meet the doctors and the patients where they are we want to provide the best efficacy and safety and we know we have that we've got and we have multiple options for product presentation. So that we can continue to really expand the marketing Mg.
Now to move into those earlier lines of treatment and as the number one biologic in the fastest growing biologic in the market, we're seeing exactly that play out.
The market look I'll hand, it over to you.
Thanks, Karen and thanks for the question, we're very excited for this upcoming results.
So directly related to the change of Permian points. So.
We changes to change from baseline in Mg ADL, because compared to a responder definition, and therefore dichotomy, you'll retain more information and therefore.
It would increase the power.
And then secondly, we were also able to negotiate with the agency that based on all the data you already have in seronegative.
We could.
Victor.
Sorry, <unk> 0.1.
So those are two things.
Okay.
And then.
We also added was a bitter.
Doug can you just take accuracy ascertainment at the beginning to make sure we have the right patients.
Yes. Thank you Luke so to wrap it up our confidence level is on the guidance is still at clinical trial, which has intrinsic risks. Thanks for the question.
Your next question comes from the line of <unk> Ahmad from Bank of America. Your line is open.
Hi, guys. Maybe my phone is just as excited about <unk> as I am.
I wanted to maybe ask a few questions can you talk about expectations for increasing competition as the airport process, specifically, we've been getting a lot of.
Questions about uplift now how are you thinking about the dynamic for that and then secondly can you just talk about the drop off rate from treatment for patients maybe let's start with gmg since it's been launched longer.
Yes, thank you for joining us.
And Kevin I think these are two excellent questions for you why don't we maybe kick it off with our views on the competitive dynamics of our space, Yes, absolutely as you say the competitive dynamics.
Competition is certainly heating up.
And I would say as the leading biologic in the fastest growing biologic.
Our task is to continue to raise the bar on what patients and prescribers can expecting Mg and we're doing exactly that.
Whether you look at our MSC rates, a rapid and sustained efficacy over 10000 patient ease of safety and we just talked about all of our product presentation. I think we set the bar very high.
In Mg, having said that and we've said this before we welcome innovation two Mg market occupancy IDP market innovation is great for patients and we believe that we are very well positioned to continue to lead and to be continue to be the fastest growing biologic within that expanding.
<unk> market in Mg.
In terms of your second question on the discontinuation rate.
I wasn't sure if it was for Mg oce, IDP or both but I can I can say for both MGMT IDP. The discontinuation rate is in line with expectations. What you would expect for a chronic medicine and in particular as we talked about earlier I think in Mg. What we're seeing is once patients get into that MSC.
They want to optimize the dose and they want to stay on <unk> got we see IDP, we're seeing the majority of patients on weekly.
Paying with weekly, but we do expect that some patients will start to switch to biweekly and a discontinuation rate is in line with what you'd expect for chronic medicine. Thanks for the question.
Your next question comes from the line of <unk> Sharma from Goldman Sachs. Your line is open.
Hi, This is Max for Roger.
So our question is us.
So first on the patient numbers, you disclosed single release and it looks like the number of patients on the car.
<unk> IV TP almost doubled from the end of January to the end of June is that a good proxy for the growth rate during the remainder of the year.
Okay.
Yes. So thanks for the thanks for the question, we're really pleased with that 2500 patient number and I think what you can expect is that the growth will continue through the end of the year I do want to remind you that 2500 patients is global.
And in particular, we had a launch in Japan in the beginning of the year. We recently had the EMA approval. So we've also launched in Germany, and I can tell you that both of those markets are off to a very fast start similar to what we saw in the U S and I think what those fast start across all markets demonstrate is that patients and <unk>.
<unk> have been waiting for innovation to come to this the IDP market and Theyre excited both they've got.
Thanks for the question.
Your next question comes from the line of James Gordon from Jpmorgan. Your line is open.
Hello, James Gordon Jpmorgan. Thanks for taking the questions. Just one last question is on the <unk> launch.
President you pointed us to just being reimbursed from 12000 USD IDP patients.
<unk>.
But what are you seeing that I might change we did a survey that says we'll just wanted to say, it's actually quite hard to use was already in <unk> naive patients.
<unk> is going to increase uptake is going to be quite as quickly in the naive patients as the experienced patients.
Are you seeing any of that how might that change.
How are you shaped or you're going to get some more data in CRT P to try and get used earlier or just it takes time.
And then just a follow up which was gross margin assumptions.
Some concern, but gross margin was going to contract as a result of alright. Thank you. The discount you have to give and take time to time.
But then I would saw some conventional zaina, which seems to suggest a very significant reduction in production cost for this call.
Presumably will help your Cogs ratio a lot so what's the gross margin outlook going forward.
Maybe Karl you started the question too on the cost of goods and the impact on gross margin and an academy can bring it back to you too.
Where we are on the adoption curve and share it would be and how we see the default Carl Thank you James. Thank you for the question. The gross margin on a year to date basis is currently at around 11% going forward, we expect that number to remain at around 11% two offsetting factors going into that we've continued to do.
John if down the cost of sales with <unk> as we move to larger sites spoke sites with higher yields and economies of scale and that is the reference I think he is probably referring to also.
Cost of sales is the royalty, we pay to <unk> and with <unk>, becoming a bigger share of our business and remember we paying royalties only online through northern IV, you would expect that royalty number.
To increase overtime, so the decreasing standard cost of sales lastly, increasing royalties should largely offset and therefore, we expect.
Cost of sales percentage to be around 11%. Thank you for the question.
Thank you and in terms of the IDP patient dynamics. So we're one year into launch we're seeing strong growth in patient adds we are still seeing in our data that 85% to 90% of the patients are coming from IV aig's switches and Youll recall that is what we expected and that's how we define that 12.
Our Tam our addressable market and patients that are uncontrolled on their current medicines. The majority of which is IV AIG. So we are still seeing that thats, where the majority of our sort of businesses that could expand over to over time, but I would caution that we are very early on the launch curve.
We're just one year into the launch that we have a lot of growth ahead of us and a long way to go even in those 12000 uncontrolled patients to your question about when would we expect it to start to get into earlier line patients or some naive patients. We do see some already a label enables that so we don't need to do an additional study.
Or change our label rather the key here is making sure that we get the payer access in in.
In place and obviously HCP and patient experience is going to be critical as well, but but I think youre pointing out. The most important fact, which is we are very early on the growth curve and see IDP. Despite the strong update.
Thanks for the question.
In the interest of time, we ask that you. Please limit yourself to one single part question. Your next question comes from the line of <unk> <unk> from Guggenheim. Your line is open.
Hey, guys. Thank you for taking my question just a quick one on gross to net as a clarification. So for this quarter. It was 20% could you comment on how do you think it is going to evolve for the second half of this year and then as we go into next year.
Yes. Thank you.
Yes, and thank you for the question, yes for gross to net increased to 20% and that is a year to date number it's not referring to the second quarter.
8% increase from the end of last year to the middle of the year.
We talked about the key drivers.
Our gross to nets are won't repeat but I think what's really important is that the bulk of the increase is now behind us.
Going forward, we will see increases in gross to net but it will be smaller increases driven by the product mix.
<unk> has become our biggest share of our business, which it will you're going to see gross to net creeping up but the important thing and what we want to emphasize is that the net revenue per patient has not changed and is that at least for foreseeable future. We are not expecting that to change TFS comes with.
With unique dynamics, but ultimately it's expanding the market, resulting in incremental patients, which will drive revenues. Thank you for the question.
Your next question comes from the line of Yaron Werber from TD Cowen Your line is open.
Great.
That's on a great quarter.
Two quick interrelated questions, maybe just the first one.
Give us an update on the IV the sub Q switch would regard that youre seeing so far.
Then secondly, we noticed the new energized phase three for <unk> at the head against placebo. So this is not an <unk> switch.
There is almost like a part a and then part b in the phase III in adults with <unk> can you talk about the trial design and the strategy. Thank you.
Thank you Ron and thanks for joining us today in the call maybe Karen you want to talk a little bit about our IV to subdued which is not really switch dynamics driving and then Luke I would like to call on you to explain a little bit of a M best strategy and the high level features of this placebo controlled second.
Trial, Okay got it yes.
Happy to take the question so as Tim already flagged our strategy with a pre filled syringe a subcutaneous is not a switch strategy. It's a market expansion strategy and we're seeing that play out.
In the market in fact, we're also seeing and recall that IV is only indicated for Mg. What we're seeing is continued growth in the IV business.
So and we expect that that will continue and we will continue to see a substantial IV business in Mg and the reason for that is again.
Prescriber preference as well as patient preference there is a portion of patients and prescribers, who prefer that product presentation, and we expect that to continue to grow over the coming years.
And Luke if I can hand, it over to you for the <unk> question.
Yes, it's energizing.
So the approach we're taking here is that.
We learned a lot and we've been in.
Operators now.
The <unk> field to first bringing that's going to take the most forward can we chose to Ken.
However, after a 70% response, which would indicate an IGT the tendency, but a third who didn't respond.
And that brings us to the question on <unk>.
We are not satisfied and then we saw the results of Mmm.
With empower which were.
Quite spectacular and we started thinking.
Between March continue our journey.
Develop solutions for CIC patients by also meter dosing and placebo groups.
Once you've made that decision. The first thing is the recognition IV LNG is of course widely used.
Could we be an improvement over <unk>, but that is multi only approach and thats why we also felt to kind of broaden that.
Our ability to get a signal in patients showed in cancer patients that are either refractory or naive.
And look at the power of <unk>.
Vascepa advance in that study study is pretty simple.
24 week study against placebo.
Thank you Luca and we believe CDP will become an increasingly competitive space and therefore, the clinical development strategy, which you see emerging clinical trials for golf is basically their tickets and put the best possible positioning in that exciting marketplace. Thanks for the questions.
Your next question comes from the line of Sean Lehmann from Morgan Stanley. Your line is open.
Thank you operator, and good morning, good afternoon, Tim maintained thanks for taking my question.
Thinking strategically I mean, you guys are now in a new area of profitability I think cash flow will increase to cash was the last half a billion for the six month period.
On the other hand, you have got a number of clinical trials coming up I'm. Just wondering how do you see the business evolving from here and what do you think of margin and what's the balance sheet strategy going forward.
Yes, we're not going to comment on margins and it's still the goal for us to strive for certain ratios and margins as an innovator in our space, but let's try to ask the question from a capital allocation point of view right. Karl because we are accumulating cash maybe able to covenanters, yes, we have a really strong balance sheet.
<unk> $9 billion.
We added 500 million half a billion dollars in the year, but also from our operating cash flow of 400 $400 million in the year, which is really good.
Also as the CFO I'm really proud to say, but the revenue growth is outpacing the opex growth but.
Resulting in incremental profit quarter over quarter, but that in itself is not the goal here, we are focusing on clinical catalyst and revenue growth our capital allocation priorities has always been clear priority number one is to deliver on the promise open Scott there's still a lot of work to do many indications and studies.
Following that is.
It is important for the rest of our pipeline and we've talked about it earlier lots of exciting assets in science and we want to invest their third what I want to highlight is the investment in our supply chain.
The decisions, we've made years ago brings us to the position today, but we can say, we have enough inventory and supply for all scenarios and we now need to make those same decisions or tomorrow and that requires a lot of capital.
Yes.
Is where are we starting to think about business development. The company has always looked outside through innovative biology.
Typically we found an academic centers, but we now moving to a stage, where we can use the strength of our balance sheet to also look at other biotechs.
And first of course, we will get to a stage, where we're going to return cash to shareholders, but that is not really part of a discussion today. So thank you very much for the question.
Your next question comes from the line of Thomas Smith from Leerink Partners. Your line is open.
Hey, guys. Good morning, Thanks for taking the questions and congrats on the really strong quarter just on <unk> I was wondering if you could comment and maybe provide some updated thoughts on the FDA update from June is there any visibility on where FDA is with their analyses or.
Expectations on the timeline for resolution and then I'm just curious if there's any feedback you're hearing from prescribers in the field on this any kind of evolution in thinking about how they're approaching switching from IV <unk>. Thanks, so much.
Yes, and I'm going to give the floor to briefly comment on this.
A question and then maybe Karen Tang for you to Ecuador voiceover fueled by the marketplace look why don't you kick it off.
Yes, and thanks for the question.
Allowing to give some context to this.
First first talk about shares itself and so that's an important tool in the safety monitoring.
<unk> 2004.
But it comes with many limitations and so it is actually in a building.
So Tony on database with inputs from sponsors providers and patients.
Bob One thing that is missing in there as denominator.
And is therefore, not really useful tool to immediate assign causality or definitely notes.
<unk> restatements.
And the reason I'm, saying that instead of fast increase in exposure could lead to an increase in reporting.
That is maybe one of the reasons here.
You saw the success, we're having in CIP.
Having said that of course are monitoring this ourselves and <unk>.
In conversations with the agency as per normal procedures.
And in that sense, we have to note that this list as it's called.
We showed as a potential safety signal that requires monitoring.
Now you still have two levels, one important potential which has a much shorter window evaluation or potential, which typically has a 12 month evaluation periods.
And at the end of bets.
In many cases nothing happens.
Or the margin guarantees extend this better.
But of course, we can never exclude that we have to have a dialogue with the agency about a label change but at this point, we don't have sight on that.
Given the rates we observe ourselves.
As being the sponsor of.
Less than 2% of these sort of events with over 2500 patients exposed.
We feel that the currency benefit risk ratio and CIP is maintained.
Thank you Carl and and just to add to that in terms of the feedback from prescribers I would say the early experience, but that we hear about from prescribers is very positive and we continually hear that that real world experience mirrors, what we saw in it here in the clinical trial.
The other positive signals that we see is that we are investing in patient activations and many patients are going into US then urologists about they've got 50, IDP and what we're seeing is a very high grant rate when the patient asked and what that means and what that demonstrates is the neurologist had confidence and belief in this.
In both the efficacy and the safety profile of the medicine, and that's obviously translating into the strong patient growth numbers that we're seeing in the quarter as well.
Really positive early experience.
Thanks for the question.
Your next question comes from the line of Myles Minter from William Blair. Your line is open.
Hi, congrats on the quarter. Thanks for the question.
Following up on this actually.
Thank you.
Disclosed.
<unk> thousand 316 patients as of January 31st on Hot roll on Saturday.
The west named rate was three 3%, it's pretty long now that you've got greater than two and a half thousand patients on therapy can you update us on that right there or do you plan to update US and then the second question is just on the face for IV Iron Jada ask Scott <unk> switch study and say Hey are we still expecting data for that this year.
Thanks very much.
Yes, Martin I'm going to give you a very prevents a cerebral monitoring all aes.
Of course in the real World. This specific AE of <unk> worsening is actually not going up it's rather stable or going down. It is a very small number and I want to remind the audience that industry IDP setting specifically any therapeutic switch you would consider as a physician carries the risk of GBP worsening.
Is simply a known fact.
In this space, what I do want to call out as a transformative benefits, which we see from today's guidance. So many patients the amount of patient anecdotes, which are reaching us every week in terms of improvement and functionality I think it's just impressive and to conclude.
From where we sit we don't see a real benefit risk.
A change.
Switch study I think is well on track.
<unk> and we will keep you updated genome under study progresses finalizes and as you can expect data to be reported at a clinical conference.
Thanks for the question.
Your next question comes from the line of Samantha <unk> from Citi. Your line is open.
Hi, good morning, and thanks very much for taking the question just one on the pipeline for me I'm wondering if you could just share some context on your decision to advance clinical development of <unk>.
G X 119.
Just the data you've seen so far in CNS does it increase your enthusiasm as well for ALS and SMA and just more broadly I'm wondering what the overall market opportunity across indications for 2019 is that you're envisioning thanks very much.
So Michael Thank you for the question in one online or in our latest Kid on the block and we have the benefit of having look here. So look could you contextualize. The go decision of the CMS. Please and what is your view on potential read through on other indications and then I will briefly summarize how we look at the totality of the opportunity okay.
Yes, certainly so we chose the indications CMS, which is an ultra rare indication.
That's for us will be the best.
And human proof of biology at work or <unk>.
<unk> antibody for mask.
And therefore, we designed a small.
To also do some biofuel patients both highly.
Densely monitors which readouts.
Also building intra patient dose escalation to come to the end so easily a proof of biology.
And so the basis for our decision is is that we do to find this we found that.
Hey.
A clinically relevant endpoints.
Correlated with.
Digital end points.
And also with clinician observed strengthening the links.
And so the endpoint six minute.
Walk test.
Just one measure of cadence and strength on the.
Two mg.
We have to see.
Neutral with an increasing ability to walk longer distances.
In these patients and that's really made us say, we have proof of biology.
And there.
We're going to continue the path and CMS and as <unk>.
Far as we can.
With respect to read through to the other indications.
There should be some correlation but there are two different things here.
One is that the diseases that we are testing AOS.
In SMA.
Our of course complex.
Different biology, so we should not simply assume that theres, a 100% read through.
And Thats why we designed a list.
And we have a POC.
Testing multiple doses.
SMA is currently.
Being designed.
Yes. Thank you Luke so it is not a normal minus it's a typical or genex molecule program. It concentrates on the innovation playbook right. So novel targets, where we collaborate with world experts.
<unk> antibody, which we made another potential pipeline and appropriate because we have now already in three indications.
And CMS is SMA, but just think about a molecule which has the potential to rejuvenate the neuromuscular junction that has exciting potential across a number of nerve regeneration indications, but also muscle diseases. So stay tuned we are still assessing further potential in more indications to come and thanks.
For the question on online.
Your next question comes from the line of Gavin Clark Gardner from Evercore. Your line is open.
Hey, guys and congrats on the great progress. So this week Astrazeneca noted that they expect 40% of Mg patients to be on self administered therapies by 2030 I am curious if this aligns with your market research and very early PFS experience Athena data. Thanks.
Yes, Thank you, Kevin and it's tough to comment on market research results from from our colleagues in the field I.
I think what we tend to agree that general sales administration is important for patients as we had actually already evidenced today and remember the R&D day.
Last July where we basically increased our expectations for the total Tam in Mg.
PFS in Southern administration actually is going wide after that box, which we showed a 23000 extra patients.
Which we added in addition to the initial 17.
Which we had at the start of the Mg launch so.
Very important but.
But we cannot comment on decent number specifically.
Thanks for the question.
Your next question comes from the line of Andy Chen from Wolfe Research. Your line is open.
Hi, This is Sam on for Andy Thanks for taking our questions and congrats on a strong quarter in the press release, it's mentioned that you're still in the early stages as MTN CRT P. Launches. We're just curious how you guys know the launch is still in early stages is it because the prescriber cover just a small percent of our new prescriptions still rising or argue.
<unk> charges faraway from theoretical Tam. Thank you.
Yes, thanks for the question.
And I think it's all of those factors so let's take it step by step so first in MG I mean with 14 quarters in but what we continue to see is that strong quarter over quarter patient growth as you said and I think we're fueling that growth with new innovation for example, bringing pre filled syringe to the market and is just.
Tim just talked through we.
We see that the biologics market.
Share of market will grow in Mg, we estimate that it will grow by about 25000 patients. We also continue to invest in they've got and getting the broadest label full days got so we have a fear of negative and our ocular Mg studies and that means that the total addressable market in Mg and ends up being around <unk>.
60000 patients so that's where we get to we still despite being 14 quarters in and with continuous growth. We're still early in the market opportunity for Mg. Likewise, we see IDP, we're only one year into launch we see IDP and we're seeing continued strong uptake in the market. We said that the Tam there is 12000 patients.
So we still have a way to grow and I think over time and certainly over the long term you can start to imagine that with more innovation coming to market. We just talked about impostor prove out potentially with the IDP you can start to see that.
That market will start to grow beyond the 12000 as well over the long term. So I think if you take a step back.
When you look at our continued growth that we've delivered since the they've got launch and the fact that we have six phase III studies reading out in the next 18 months you can see that as a company. We're very much on the early side of the growth trajectory. Thanks for the question.
Okay.
Your next question comes from the line of Douglas Tsao from H C. Wainwright. Your line is open.
Hi, good morning, Thanks for taking the questions and congrats on all the progress I'm just curious in terms of the PFS, we've talked to some physicians who have said they've had some challenges in terms of getting patients access to the product I'm just curious.
Is that sort of one offs or is there still a situation, where perhaps demand is sort of exceeding.
The available supply.
Yes, thanks for the question look.
Look I think it's we're only one quarter into launch.
And normally with these with the launch of PFS, and we always say that with any new launch it takes about two quarters to get access in place and I think we sometimes forget about that because our access team does such a great job and always speak to expectations on that.
So of course in early stages, they're all going to be some questions like that or some feedback while we get access into place what we.
We see though is very is that we have 70% of commercial lives.
We've pre filled syringe and in general and we're adding to that all the time in general the feedback that we get from the field is that prescribers are very pleased with how quickly we're getting access for patients to pre filled syringe I think that's reflected in the strong uptake.
And Doug if I can add we definitely have enough inventory available, it's not driven by inventory.
Yes.
Thanks for the question. Thank you.
Your next question comes from the line of Victor Flock from BNP Paribas. Your line is open.
Hi, Thanks for taking my question with the frequency of talking about it.
As basically just one question on an ITT actually.
I was wondering if you could update us on the.
Feedback since launch because if I remember correctly your ambition at the time was to position <unk> got it is the first GPU.
Alright.
No question <unk> option basically as a first line treatment. So I was specifically wondering if the physician feedback so far in Japan basically support this in.
By any chance you could also share your market share in this market in Japan. Thanks, so much.
Thank you Victor for the question on ATP. So the launch of <unk> in Japan for IPP is actually going well and what we find exciting is to see that in the real world.
Clinical data or actually perfectly method. So we see about a 50% response rates. The drug is landing first and you know.
The last line of ICP patients after they fail.
Steroids, IV AIG and keep yields so very refractory patient population and still a very nice 50% response rate and if patients respond just like this.
Similarly in the clinical trial data spawned very quickly and the safety profile of the product is also differentiating I mean physicians badly need.
Fast acting safe drug so I think the drug is lending very well uptake is nice and I think it will be gradually moving our way up in the treatment paradigm. So all in all according to plan. Thanks for the question.
Your final question comes from the line of Charles Pitman King from Barclays. Your line is open.
Hi, guys. Thanks, very much for taking my questions. Just a final one please just on the kind of pricing dynamics, just thinking about the Medicare process for <unk>. So I'm just wondering what potential quarterly fluctuation is that between assuming a Medicare discount and then kind of right sizing it.
Kind of visibility do you have to have confidence in your comments that the net price per patient is going to remain.
Going forward as we think about trying to forecast your sales on a quarterly basis going forward and any potential fluctuations that might come as a result.
Thank you.
Yes, Ross, let me take 11 and hand over to Carl.
And we will not get into the complexities of the U S healthcare system in today's call, but I think what I want you all to remember from the call is confirmation of our Cardinal that the net contribution from MGM CDP patient is actually not changing and if and when we think it's about the change we will definitely flag it to this audience.
Anything you would like to know I think Betty.
Joel Thanks, Charles Thanks for the question.
And this concludes today's conference call. We thank you for your participation and you may now disconnect.
Okay.
Sure.
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