May 9, 2018
Breda, the Netherlands / Ghent, Belgium - argenx (Euronext & Nasdaq: ARGX), a clinical-stage biotechnology company developing a deep pipeline of differentiated antibody-based therapies for the treatment of severe autoimmune diseases and cancer, today announced financial results and provided a business update for the first quarter ended March 31, 2018.
"We made excellent progress this quarter in executing on our pipeline strategy and are well-prepared for another milestone-rich year ahead in 2018. To start with our lead program efgartigimod (ARGX-113), we presented the full data set from the Phase 2 clinical trial in myasthenia gravis at the American Academy of Neurology (AAN) Annual Meeting showing a reduction in disease scores that correlated with our understanding of the drug candidate's mechanism. We also made headway in Europe, having received an orphan drug designation in this first indication. We remain on track to report data from two additional indications for efgartigimod, including immune thrombocytopenia and pemphigus vulgaris, in the second half of the year," commented Tim Van Hauwermeiren, CEO of argenx. "The rest of our pipeline is also progressing, including ARGX-110, where we transitioned into the Phase 2 portion of the clinical trial in newly diagnosed AML patients unfit for chemotherapy and expect to report new response data by the end of the year. We continue to look for exciting targets across our research institution partners, and showcased this in the first quarter with the addition of ARGX-117 to our pipeline, offering a new target pathway for argenx and potentially a way to add synergistic value to our efgartigimod pipeline-in-a-product approach."
FIRST QUARTER 2018 AND RECENT HIGHLIGHTS
FINANCIAL HIGHLIGHTS (as of March 31, 2018) (compared to financial highlights as of March 31, 2017)
DETAILS OF OPERATIONAL RESULTS
UPCOMING EXPECTED MILESTONES
KEY FIGURES (CONSOLIDATED)
in thousands of euros
| Three months ended |
March 31, 2017
| Three months ended |
March 31, 2018
IFRS 15 (*)
| Three months ended |
March 31, 2018
|Other operating income||552||1,324||1,324||772|
|Total operating income||7,211||5,865||1,029||6,894||(317)|
|Research and development expenses||(12,196)||(15,046)||(100)||(15,146)||(2,950)|
|Selling, general and administrative expenses||(3,411)||(5,894)||(5,894)||(2,483)|
|Loss before taxes||(8,410)||(18,585)||929||(17,656)||(9,246)|
|Income tax income/(expense)||0||0||0||0|
|Loss for the year and total comprehensive loss||(8,410)||(18,585)||929||(17,656)||(9,246)|
|Net increase (decrease) in cash, cash-equivalents and current financial assets compared to year end 2016 and 2017||(11,752)||(13,197)||(13,197)|
|Cash, cash equivalents and current financial assets at the end of the period||84,977||346,577||346,577|
(*) The Company has adopted IFRS 15 on January 1, 2018 using a modified retrospective approach. The impact of adopting IFRS 15 amounts to €0.9 million for the three months ended March 31, 2018.
DETAILS OF THE FINANCIAL RESULTS
Operating income reached €6.9 million for the three months ended March 31, 2018, compared to €7.2 million for the three months ended March 31, 2017. The decrease of €1.1 million in revenue resulted primarily from a decrease in revenue recognition linked to the forthcoming completion of the preclinical activities under our ongoing collaboration with LEO Pharma. Other operating income increased by €0.8 million, resulting mainly from (i) an increase in payroll tax rebates for employing certain research and development personnel and (ii) an increase in government grant income following the approval in March 2018 of a €2.5 million VLAIO grant to identify novel therapeutic antibodies.
For the three months ended March 31, 2018, research and development expenses totaled €15.1 million, compared to €12.2 million for the three months ended March 31, 2017. The increase of €2.9 million in research and development expenses in 2018 was principally related to (i) costs associated with a planned increase in research and development headcount and (ii) increased share-based compensation expense linked to the grant of stock options to our research and development employees (including an increase of €1.1 million of social security costs on stock options granted to certain Belgian and non-Belgian resident employees).
Selling, general and administrative expenses amounted to €5.9 million for the three months ended March 31, 2018, compared to €3.4 million for the three months ended March 31, 2017 (which included €1.3 million of expenses related to our U.S. initial public offering in May 2017). The increase in selling, general and administrative expenses in 2018 was principally due to an increase of €3.7 million of personnel expenses resulting from (i) an increase of €3.3 million in share-based compensation expense linked to the grant of stock options to our selling, general and administrative employees (including an increase of €1.5 million of social security costs on stock options granted to certain Belgian and non-Belgian resident employees) and (ii) an increase of €0.4 million for additional employees recruited to strengthen our selling, general and administrative activities.
For the three months ended March 31, 2018, financial income amounted to €0.5 million and related primarily to interest received on our cash, cash equivalents and current financial assets.
Exchange losses totaled €4.0 million on March 31, 2018, compared to €0.01 million on March 31, 2017. This increase is mainly attributable to unrealized exchange rate losses on our cash, cash equivalents and current financial assets position in U.S. dollars due to the unfavorable fluctuation of the EUR/USD exchange rate during the three months ended March 31, 2018.
For the three months ended March 31, 2018, we generated a total comprehensive loss of €17.7 million, compared to a total comprehensive loss of €8.4 million for the three months ended March 31, 2017.
On March 31, 2018, our cash, cash equivalents and current financial assets amounted to €346.6 million, compared to €359.8 million on December 31, 2017 and €85.0 million on March 31, 2017.
EXPECTED 2018 FINANCIAL CALENDAR:
argenx is a clinical-stage biotechnology company developing a deep pipeline of differentiated antibody-based therapies for the treatment of severe auto-immune diseases and cancer. We are focused on developing product candidates with the potential to be either first-in-class against novel targets or best-in-class against known, but complex, targets in order to treat diseases with a significant unmet medical need. Our ability to execute on this focus is enabled by our suite of differentiated technologies. Our SIMPLE AntibodyTM Platform, based on the powerful llama immune system, allows us to exploit novel and complex targets, and our three antibody engineering technologies are designed to enable us to expand the therapeutic index of our product candidates.
For further information, please contact:
Joke Comijn, Corporate Communications & IR Manager
+32 (0)477 77 29 44
+32 (0)9 310 34 19
Beth DelGiacco (US IR)
Stern Investor Relations
+1 212 362 1200
The contents of this announcement include statements that are, or may be deemed to be, "forward-looking statements." These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes," "estimates," "anticipates," "expects," "intends," "may," "will," or "should," and include statements argenx makes concerning the intended results of its strategy; its financial condition, results of operation and business outlook; the sufficiency and the intended uses of its cash, cash equivalents and current financial assets, including investment in commercial capabilities; the timing of audited financial results; the momentum of its product candidate pipeline as well as the advancement of, and anticipated clinical development and regulatory milestones and plans related to, and data readouts for, argenx's product candidates and preclinical studies and clinical trials; and interaction with regulators, including the potential approval of our current or future drug candidates. By their nature, forward-looking statements involve risks and uncertainties and readers are cautioned that any such forward-looking statements are not guarantees of future performance. argenx's actual results may differ materially from those predicted by the forward-looking statements as a result of various important factors, including argenx's expectations regarding its the inherent uncertainties associated with competitive developments, preclinical and clinical trial and product development activities and regulatory approval requirements; argenx's reliance on collaborations with third parties; estimating the commercial potential of argenx's product candidates; argenx's ability to obtain and maintain protection of intellectual property for its technologies and drugs; argenx's limited operating history; and argenx's ability to obtain additional funding for operations and to complete the development and commercialization of its product candidates. A further list and description of these risks, uncertainties and other risks can be found in argenx's U.S. Securities and Exchange Commission (SEC) filings and reports, including in argenx's most recent annual report on Form 20-F filed with the SEC as well as subsequent filings and reports filed by argenx with the SEC. Given these uncertainties, the reader is advised not to place any undue reliance on such forward-looking statements. These forward-looking statements speak only as of the date of publication of this document. argenx undertakes no obligation to publicly update or revise the information in this press release, including any forward-looking statements, except as may be required by law.