Argenx's Autoimmune Trial Stumble: Analysts Cut Price Targets, Warn of Risky Outcomes

Wednesday, Argenx SE ARGX released topline results from the ADDRESS Phase 3 study evaluating efgartigimod subcutaneous (SC) (efgartigimod alfa and hyaluronidase-qvfc) in adults with pemphigus vulgaris (PV) and pemphigus foliaceus (PF). 

The results show that the proportion of PV patients achieving the primary endpoint of complete remission on a minimal dose of steroids (CRmin) was not significantly different between efgartigimod SC and placebo.

Scotiabank cut its price target to $346 from $444 based on model adjustments following the failure of the Phase 3 ADDRESS trial and maintains a Sector Perform Rating.

The analyst states that the failure related to ADDRESS significantly heightens the risk of unfavorable outcomes in other randomized trials for autoimmune diseases, particularly those focusing on areas where corticosteroids continue to be a fundamental part of the treatment.

Truist lowered the price target from $550 to $370 but maintained the Buy rating due to the perceived value in the approved, soon-to-be-approved, and pipeline drug compounds and indications. Truist anticipates gaining further clarity on 1/8/24.

Truist analyst notes the extensive scale of the trial involving 222 PV patients, coupled with ARGX's track record of consistently executing high-quality trials, the outcomes may indeed be significant. 

This opens up various intriguing prospects regarding the effectiveness of "low dose" steroid treatments.

Piper Sandler cut its price target from $575 to $515 with an Overweight rating but sees itself as a buyer on weakness.

The analyst highlights that the PD effect of efgar was exactly as anticipated, and the trial failure was driven by the unexpected lowering of pathogenic IgG by the low-dose corticosteroid control, which is much too soon to write off Efgar in other indications.

Price Action: ARGX shares are up 2.06% at $345.89 on the last check Thursday.