On Friday, H.C. Wainwright updated its outlook on argenx SE (NASDAQ: ARGX), increasing the price target to $617 from $533, while maintaining a Buy rating on the stock. The revision comes after argenx reported robust quarterly earnings, with global net product revenues of Vyvgart and Vyvgart Hytrulo reaching $573 million.
This figure represents a 20% increase quarter-over-quarter and a significant 74% rise year-over-year, surpassing both the consensus estimate of $529 million and H.C. Wainwright's projection of $531 million.
The company's financial performance in the third quarter was particularly noteworthy given the strong launch in the CIDP (Chronic Inflammatory Demyelinating Polyneuropathy) indication. However, it was the continued strength in the MG (Myasthenia Gravis) market that impressed analysts the most. The Vyvgart franchise has rebounded with vigor after a less robust first quarter, as highlighted by the company's management.
Argenx's management also noted the positive impact of the CIDP launch on the overall awareness of Vyvgart. The treatment for CIDP, often administered in a community setting, has led to increased recognition among healthcare providers, which in turn has benefited the usage of Vyvgart in treating MG. This has been evidenced by the fact that 12% of Vyvgart prescribers in the recent quarter were entirely new to the product.
The strong sales performance and the company's potential for continued growth have led H.C. Wainwright to adjust its price/sales multiple for argenx from 8x to 9x. This adjustment is based on a raised 2035 risk-adjusted revenue estimate, which now stands at $10.3 billion, up from the previous $10.2 billion. The cumulative effect of these factors has resulted in the raised price target for argenx shares.
In other recent news, Baird downgraded Argenx from Outperform to Neutral, citing limited short-term upside, while William Blair upgraded the stock from Market Perform to Outperform, attributing this positive adjustment to the success of the Vyvgart franchise.
These recent developments follow Argenx unveiling its Vision 2030, an ambitious plan to have 50,000 patients globally on therapy by the year 2030. The company has also recently launched VYVGART for Chronic Inflammatory Demyelinating Polyneuropathy (CIDP), with regulatory reviews for CIDP ongoing in China, Japan, and Europe, and approvals anticipated in 2025.
Despite this progress, Argenx discontinued the development of efgartigimod in MN due to insufficient efficacy. The company's strong financial position, backed by a cash balance of $3.4 billion, positions it well for further advancements in its clinical pipeline.
These are among the recent developments for Argenx, which continues to focus on high-impact programs and robust sales growth.
InvestingPro Insights
To complement the positive outlook presented by H.C. Wainwright, recent data from InvestingPro offers additional perspective on argenx SE's financial position and market performance. The company's revenue growth remains impressive, with a 98.69% increase over the last twelve months as of Q2 2024, aligning with the strong sales figures mentioned in the article. This growth is further emphasized by the 74.15% quarterly revenue growth in Q2 2024, which mirrors the 74% year-over-year increase reported in the article.
InvestingPro Tips highlight that argenx holds more cash than debt on its balance sheet and that its liquid assets exceed short-term obligations. These factors suggest a solid financial foundation, which is crucial for a company experiencing rapid growth and launching new treatments like Vyvgart for CIDP.
The stock's performance has been noteworthy, with a significant 52.95% price total return over the past six months. This aligns with the positive sentiment expressed in the H.C. Wainwright report and the raised price target. Additionally, argenx is trading near its 52-week high, with its current price at 99.44% of that peak, indicating strong market confidence in the company's prospects.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for argenx, providing a deeper understanding of the company's financial health and market position.
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