Argenx (Argenx (ARGX)) stock has been under some pressure lately after the company announced changes to the analysis plan for its ongoing Phase 3 study of Vyvgart in myositis. But H.C. Wainwright isn't worried — in fact, they see a potential blockbuster hiding in plain sight.
The analyst firm, citing a recent meeting with Argenx management, said the Phase 3 readout will now include separate analyses for two subtypes of myositis: immune-mediated necrotizing myopathy (IMNM) and dermatomyositis (DM). The company also confirmed it's dropping polymyositis (PM) from the study entirely. According to H.C. Wainwright, PM had the lowest enrollment among the subtypes, making it tough to spot a clear treatment signal.
Investors initially reacted with some caution, but analyst Douglas Tsao wrote that the "update wasn't altogether that surprising to us, since we'd known that IMNM had the strongest signal in the POC study, which drove the high level of statistical significance, and resulted in BTD from FDA." In other words, the company is doubling down on what works.
H.C. Wainwright maintains a Buy rating on Argenx with a price target of $940, and sees Vyvgart's potential in IMNM alone generating more than $1 billion in sales. That's a big number for a niche indication, but the analyst believes the drug's efficacy data supports it.
And it's not just IMNM. The firm came away from the meeting with a more favorable view of Vyvgart's prospects in dermatomyositis, too. They noted that Argenx's tone regarding DM seemed more optimistic than in recent communications, particularly after Roivant Sciences (Roivant Sciences (ROIV)) announced Phase 3 data for its drug brepocitinib in the VALOR trial. H.C. Wainwright interpreted the company's comments as a sign that management still sees meaningful potential for Vyvgart in that indication.
So while the trial tweaks might have caused a temporary hiccup, the long-term story remains intact. Argenx shares were up 4.72% at $892.70 on Thursday, inching closer to their 52-week high of $934.61.
