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The chief executive of Argenx, one of Europe’s biggest biotech companies, says Europe needs to learn from U.S. shareholders willing to bet big on biotech if it wants its domestic industry to prosper. .
Tim van Hauermeiren told the Financial Times that Europe was facing a “chicken and egg” problem. So there’s a lack of biotech available for investment, there’s a lack of specialized medical funds, and there’s a lack of biotech because domestic investors aren’t backing it.
Argenx’s shareholder base is dominated by professional investors from the United States, who Van Hauermeiren said really “have a long-term view and are willing to take risks.” “Because in fields like biotechnology, the benefits can be disproportionate if there are real benefits,” he says.
Many European shareholders remain reluctant to invest in Belgium-based Argenx, even though the product is on the market and has been identified by analysts as a potential acquisition target for several large pharmaceutical companies Scottish fund Baillie Gifford is a rare exception.
“I think we have ticked a lot of the boxes that are important to European shareholders. I think the last box they are still waiting on is the break-even point, which is the turning point in profitability,” he said. said.
Argenx has had a rollercoaster 2023, with its stock up about 40% after positive test results in July, but negative results after another study published in December. After that, the stock fell by up to 29%.
The company is expanding the use of its immunotherapy drug Vibgart to a variety of diseases. It is used for a rare chronic immune disease called myasthenia gravis that causes muscle weakness.
Similar to scientists’ work on cancer over the past decade, the immunotherapy market is growing as researchers discover ways to take a more targeted approach to treating autoimmune diseases.
In July, Argenx reported positive trial results showing that Vibgart can be used as a treatment for chronic inflammatory demyelinating polyneuropathy, a condition in which the immune system attacks the protective membranes around nerves. That success led the company to raise an additional $1.1 billion last year, making it the largest investment of its kind in the biotech space, according to research firm Dealogic.
But clinical trials using the drug to treat primary immune thrombocytopenia, a blood-clotting disorder, failed to meet their goals, and the stock plummeted when the results were announced in late November. Van Hauwermeiren said the company is still analyzing what happened in the study.
Argenx announced in December that it would not pursue the drug for use in the skin disease pemphigus after clinical trials showed it was not significantly more effective than a placebo.
Many European biotech companies are acquired by large pharmaceutical companies long before their products are approved. Van Hauermeiren said he is bucking that trend by building a “global sustainable company” and “a company that can fly on its own wings.”
But he said management will always do what is in the best interest of shareholders if a takeover offer is presented.
“The only thing we can do as management is make sure everyone understands what a business plan is…[in]Independent scenarios over the next five years. That way, people can also objectively compare whether and when bids are made. ”
Suzanne van Voorthuizen, head of life sciences equities at investment bank Kempen, said the company’s potential “blockbuster” drugs were attractive to acquirers.
However, it added that given Argenx’s market capitalization of $20 billion, suitors would have to bid up to $40 billion. “A deal of this size happens once a year, once every two years. There aren’t that many potential buyers.”
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