Argenx to Regain Worldwide Rights to Cusatuzumab from Janssen

Immunology company Argenx SE (ARGX) is regaining the global rights to its anti-CD70 antibody cusatuzumab from Janssen Pharmaceutical.

Argenx and Jannsen had entered into a collaboration to develop custuzumab in 2018 and Argenx had received about $525 million from Janssen in the form of cash, equity investment, and milestone payments. On June 4, Janssen informed Argenx of its decision to discontinue the collaboration.

Data from the Phase 1b ELEVATE trial of the drug support its development for treating acute myeloid leukemia (AML). Argenx expects to weigh options for a path forward for the drug.

In the ELEVATE trial, the drug showed a consistent safety profile and was well tolerated with observed complete remission of 48% and an overall response rate of 93%.

Argenx CEO Tim Van Hauwermeiren said, “We have valued the productive collaboration with Janssen that has advanced our understanding of cusatuzumab and its role in AML biology….we set our target high with the ELEVATE trial, recognizing that cusatuzumab would have to add benefit to an already-established combination regimen.” (See Argenx stock analysis on TipRanks)

Hauwermeiren added, “We believe these interim data show that cusatuzumab could be meaningful to AML patients. We plan to evaluate all alternatives to advance cusatuzumab on behalf of the AML community.”

On June 3, Robert W. Baird analyst Joel Beatty reiterated a Buy rating on the stock and raised the price target to $346 from $340.

Beatty thinks Argenx’s lead agent efgartigimod has a strong sales potential in multiple autoimmune diseases.

Consensus among analysts is that Argenx SE is a Moderate Buy based on 5 Buys and 2 Holds. The average analyst price target of $326.77 implies 21.1% potential upside for Argenx.

Shares have dropped about 8.2% since the beginning of the year.

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