Annual
Report
2021
United in our
commitment to
improve the lives
of patients.
At argenx, we are commied to improving the lives of people
suering from severe autoimmune diseases.
Annual
Report
2021
Each day at argenx, we are motivated to pursue
a better tomorrow alongside patients.
We See You,
We Hear You,
We Are Here With You
As your ally, we pioneer innovaons to advance the understanding of rare
diseases; we want to deliver immunology treatments to paents worldwide.
We listen to paents, supporters and advocacy communies; we hear your
stories and share your determinaon.
2022 Universal Registration
Document including the Annual
Financial Statements 2021
Registration Document, dated 30 March 2021 | 5
argenx SE (herein
argenx
or the Company
and, together with its subsidiaries, the
Group
,
we
or
us
) is a European
public company (Societas Europaea) incorporated under
the laws of the Netherlands with its statutory seat in
Roerdam, the Netherlands, which is listed in Belgium
and the United States of America (
U.S.
). The applicable regulaons with respect to public informaon and
protecon of investors, as well as the commitments
made by argenx to securies and market authories, are
described in this universal registraon document (the
Universal Registraon Document
or
URD
).
This Universal Registraon Document was prepared by
argenx in accordance with Regulaon (EU) 2017/1129
(as amended, the
Prospectus Regulaon
) in conjuncon
with annex 1 and annex 2 of Commission Delegated
Regulaon (EU) 2019/980. This Universal Registraon
Document has been approved by the Dutch Authority
for the Financial Markets (Schng Autoriteit Financiële
Markten, the AFM) on March 21, 2022 as competent
authority pursuant to arcle 9 of the Prospectus Reg
-
ulaon. The AFM only approves this URD as meeng
the standards of completeness, comprehensibility and
consistency imposed by the Prospectus Regulaon. Such
approval should not be considered as an endorsement
of the issuer that is the subject of this URD.
This Universal Registraon Document is valid for a peri
-
od of twelve months aer its approval. The validity ends
upon expiraon on March 21, 2023. There is no obliga
-
on to supplement the Universal Registraon Document
in the event of signicant new factors, material mistakes
or material inaccuracies when the Universal Registraon
Document is no longer valid.
This Universal Registraon Document may be used for
the purposes of an oer to the public of securies or ad
-
mission of securies to trading on a regulated market if
approved by the AFM together with any amendments, if
applicable, and a securies note and summary approved
in accordance with the Prospectus Regulaon. This
Universal Registraon Document also contains the infor
-
maon referred to in arcle 4 of Direcve 2004/109/EG
and as such – pursuant to arcle 9 paragraph 12 of the
Prospectus Regulaon – sases argenx’s obligaons to
publish an annual report within the meaning of Direcve
2004/109/EG.
In addion to historical informaon, this Universal
Registraon Document contains certain forward-looking
statements. A forward-looking statement is any state
-
ment that does not relate to historical facts or events
or to facts or events as of the date of this Universal
Registraon Document. Forward-looking statements
are generally idened by the use of forward-looking
words, such as “ancipate”, “believe”, “can”, “could”,
“esmate”, “expect”, “intend”, “is designed to”, “may”,
“might”, “objecve”, “plan”, “potenal”, “project”,
“predict”, “target”, “will”, “should”, or other varia
-
ons of such terms, or by discussion of strategy. These
statements relate to argenx’s future results of opera
-
ons and nancial posions, prospects, developments,
business strategies, plans and our objecves for future
operaons, and are based on analyses or forecasts of
future developments and esmates of amounts not
yet determinable. These forward-looking statements
represent the view of argenx only as of the dates they
are made, and argenx disclaims any obligaon to update
forward-looking statements, except as may be other
-
wise required by law. The forward-looking statements
in this Universal Registraon Document involve known
and unknown risks, uncertaines and other factors
that could cause argenx’s actual future results, perfor
-
mance and achievements to dier materially from those
forecasted or suggested herein. These include changes
in general economic and business condions, as well as
the factors described in chapter 2 “Risk Factors” of this
Universal Registraon Document.
6 | Patient Stories
Patient Stories | 7
We integrate our paents aspiraon into how we
innovate, how we conduct research and design trials,
and how we can support you in the daily struggles you
face living with a rare disease.
There is a common purpose across argenx that is driven
by your resilience and we welcome this opportunity to
be with you on this journey.
Together we discover,
Team argenx
Read her story on page 214
Patient
Stories
Kelly M. - CIDP
Linda M. - ITP
Zach M. - MG
Victor Y. - MG
David B. - PV
Daniel A. - MG
Lisa Ann T. - PV
Kim V. - MG
37
48
70
120
173
192
214
236
Lisa Ann
Patients
living with a
rare disease
Patient
Story
Table of Contents
8 | Table of Contents
Table of Contents | 9
1 Presentation of the Group
1.1 Company Prole 30
1.2 Strategy and objecves 34
1.3 Our Products and Product Candidates 38
1.4 Collaboraon Agreements 56
1.5 License Agreements 60
1.6 Distribuon Agreements 66
1.7 Manufacturing and Supply 66
1.8 Intellectual Property 66
1.9 Regulaon 72
2 Risk Factors
2.1 Risk Factors Related to argenx’s Financial Posion and Need for Addional Capital 98
2.2 Risk Factors Related to the Development and Clinical Tesng of argenx’s Products
2.3 Risk Factors Related to Commercializaon of argenx’s Product Candidates 108
2.4 Risk Factors Related to argenx’s Business and Industry 114
2.5 Risk Factors Related to argenx’s Dependence on Third Pares 119
2.6 Risk Factors Related to argenx’s Intellectual Property 124
2.7 Risk Factors Related to argenx’s Organizaon and Operaons 133
3 Non-financial Reporting Requirements
3.1 Disclosures pursuant to the EU Non-Financial Reporng Direcve 142
3.2 EU Environmental Taxonomy 147
4 Corporate Governance
4.1 Dutch Corporate Governance Code, “Comply or Explain” 150
4.2 Management Structure 151
4.3 Report of the Non-Execuve Directors 169
4.4 Remuneraon Report of the Remuneraon and Nominaon Commiee 174
4.5 Risk Appete & Control 202
5 General description of the Company and it’s Share Capital
5.1 Legal Informaon on the Company 208
5.2 Share Capital 209
5.3 Share Classes and Principal Shareholders 216
5.4 General meeng of Shareholders and Vong Rights 217
5.5 An-Takeover Provisions 218
5.6 Amendments of Arcles of Associaon 218
5.7 Obligaons of Shareholders and Members of the Managing Board to Disclose Holdings 219
5.8 Short Posions 220
5.9 Market Abuse Regime 220
5.10 Transparency Direcve 221
5.11 Dutch Financial Reporng Supervision Act 221
5.12 Dividends and Other Distribuons 221
5.13 Financial Calendar 2022 222
6 Operating and Financial Review
6.1 Overview 226
6.2 Basis of Presentaon 227
6.3 Capitalizaon and Indebtedness 233
6.4 Crical Accounng Policies and Signicant Judgements and Esmates 234
6.5 Results of Operaon 235
6.6 Liquidity and Capital Resources 241
6.7 O-Balance Sheet Arrangements 243
6.8 Contractual Obligaons 243
6.9 Financial Statements 244
6.10 Informaon Regarding the Independent Auditor 244
6.11 Material Contracts and Related Party Transacons 244
6.12 Employees 246
6.13 Legal and Arbitraon Proceedings 247
6.14 Insurance 247
7 Consolidated Financial Statements
7.1 Consolidated Statements of Financial Posion 250
7.2 Consolidated Statements of Prot or Loss 252
7.3 Consolidated Statements of Comprehensive Income and Loss 253
7.4 Consolidated Statements of Cash Flows 254
7.5 Consolidated Statements of Changes in Equity 255
7.6 Notes to the Consolidated Financial Statements 256
8 Company Financial Statements
8.1 Signatures of Execuve and Non-execuve Directors 298
8.2 Company Balance Sheet on December 31, 2021 argenx SE 300
8.3 Company Prot or Loss Account for the Year ended December 31, 2021 argenx SE 301
8.4 Notes to the Company Financial Statements of argenx SE 302
8.5 Other Informaon 307
8.6 Independent Auditor’ Report 308
9 Information incorporated by reference
318
10 Glossary
320
The science of co-creaon drives our quest to engineer innovave
immunology soluons – but it is the resilient spirit of paents that fuels
our urgency to deliver them.
Our goal is to treat the person, not just the disease, across all of our
programs. We believe that through collaboraon with paents and their
supporters, we can create medicines that aim to address the real-life
burden faced by rare disease communies.
Contents
Message from the CEO and the chairman of our Board of Directors 15
2021 in brief 16
Outlook 2022 22
To Our
Shareholders
Message from the CEO and the chairman of our Board of Directors | 15
To Our
Shareholders
“ argenx will continue to work
diligently to bring VYVGART to
as many patients as possible
around the world”
Tim Van Hauwermeiren
14 | Message from the CEO and the chairman of our Board of Directors
Message from the CEO and the chairman
of our Board of Directors
Dear Shareowners,
We will always remember 2021 as a pivotal moment
in the history of argenx. It marked the year of our rst
product approval and ocial transion into an indepen
-
dent, fully integrated immunology company, owning the
full value chain of a drug candidate – from idenfying
an immunology breakthrough to reaching paents.
We received approval of VYVGART™ (efgargimod)
from the U.S. Food and Drug Administraon (
FDA
) on
December 17, 2021, for the treatment of generalized
myasthenia gravis (
gMG
) in adult paents who are an-acetylcholine receptor anbody posive. On Jan
-
uary 20, 2022, we received approval in Japan and are
on track for an approval in Europe by the end of 2022.
When we ventured to bring this asset into the clinic
years ago, we made a commitment to the gMG commu
-
nity that we would deliver an innovave new treatment
opon to these paents who carry the daily burden of
living with this serious autoimmune disease.
We are honored and humbled by the opportunity to
now turn to this community and tell them we followed
through on our commitment, and that we will connue
to work diligently on their behalf to bring VYGART™ to
as many paents as possible around the world.
The journey to arrive at our rst product approvals
was a feat of true co-creaon, not just in 2021 but
with the decade of work that led to these achievements.
Efgargimod was rst built through our collaboraon
with Professor Sally Ward and UT Southwestern. It has
now been evaluated in over 600 subjects across ve
autoimmune indicaons, and we expect to be conduct
-
ing trials for ten high-value indicaons by the end of
2022. This will be a busy year with the start of mulple
trials and plans for the readout of ve registraonal
trials over the next four quarters, which we expect to
set us up for four commercial launches in gMG, ITP, PV
and CIDP by the end of 2024. It is an ambious plan,
and we’re condent in our team’s ability to connue to
deliver across the business.
We laid out our ‘argenx 2025’ vision during our R&D
Day last July, which outlines the growth trajectory
we are on as a company driven by our dierenated
pipeline candidates and growing commercial franchis
-
es in neuromuscular, hematology, dermatology and
nephrology. Our goal is to be in at least 15 efgargimod
indicaons by 2025. We launched our rst Phase 2 trial
of ARGX-117 at the end of 2021, which oers a second
pipeline-in-a-product opportunity across mulple fran
-
chises. And ARGX-119 was unveiled as a third high-po
-
tenal candidate within our neuromuscular franchise.
Through our Immunology Innovaon Program, where
we partner with leading disease biologists to uncover
novel immunology breakthroughs, we plan to connue
our pipeline expansion with the goal of adding one new
asset each year.
We know that gMG is just the beginning for argenx.
Our team is highly movated, bringing strong experse
to the table, and ready to execute on our ambious
plan, and we have a strong balance sheet to support our
goals, thanks to our shareholders. We want to extend
our gratude to all of our employees for their unwavering
commitment to our mission of redening immunology,
our collaborators across the enre business and of
course, the paents who put their trust in us to deliver.
Thank you,
Tim Van Hauwermeiren & Peter Verhaeghe
Peter Verhaeghe
16 | 2021 In Brief - Operational Highlights Global Efgartigimod Launch | 17
• On December 17, 2021, the FDA approved VYVGART™ (efgargimod alfa-fcab)
for the treatment of gMG in adult paents who are an-acetylcholine receptor
(AChR) anbody posive.
• A request for approval of VYVGART™ (efgargimod alfa) for the treatment of
adult paents with gMG who do not have sucient response to steroids or
non-steroidal immunosuppressive therapies (ISTs) was submied to the Japan
Pharmaceucals and Medical Devices Agency (PMDA), which was subsequently
approved on January 20, 2022.
• Markeng Authorizaon and Applicaon (MAA) of efgargimod for the
treatment of gMG was submied and validated by the European Medicines
Agency (the EMA), starng the formal review process.
Global Efgartigimod Launch
2021
In Brief
Operational Highlights
2021 was another pivotal year for argenx even through the con
-
tinued challenges of the COVID-19 pandemic. We transitioned to
a fully integrated immunology company following the approval
of our first product, VYVGART™ for the treatment of gMG. In ad
-
dition, we advanced our late-stage efgartigimod trials across four
indications, announced two new efgartigimod indications and
started patient trials with our second candidate, ARGX-117.
Efgartigimod
18 | Pipeline of Dierentiated Antibody Candidates Corporate Achievements | 19
Pipeline of Dierentiated
Antibody Candidates
• Efgargimod (FcRn blocker)
•
Registraonal trials ongoing across four serious autoimmune indicaons, in
-
cluding gMG, primary immune thrombocytopenia (
ITP
), pemphigus foliaceous (
PF
) and vulgaris (
PV
), and chronic inammatory demyelinang polyneuropa
-
thy (
CIDP
).•
Two addional indicaons announced during R&D Day: idiopathic inammato
-
ry myopathy (
myosis
) and bullous pemphigoid (BP
):–
BALLAD: registraonal trial of subcutaneous (SC) efgargimod in BP iniat
-
ed at end of 2021.
–
ALKIVIA: trial design nalized of SC efgargimod in myosis following inde
-
pendent data monitoring commiee’s advice.
•
New gMG data from Phase 3 ADAPT trial presented during American Associa
-
on of Neuromuscular and Electrodiagnosc Medicine (AANEM) Annual Meet
-
ing and Myasthenia Gravis Foundaon of America (MGFA) Scienc Session.
•
ADAPT Phase 3 trial results of efgargimod for treatment of gMG published in
The Lancet Neurology.
•
Full Phase 2 trial results of efgargimod for treatment of pemphigus published
in Brish Journal of Dermatology.
• ARGX-117 (C2 blocker):
•
Phase 1 data presented during July R&D day showing favorable safety prole
and potenal for infrequent dosing schedules.
•
Phase 2 trial in mulfocal motor neuropathy (MMN) iniated at end of 2021.
• ARGX-119 (MuSK agonist):
•
Announced next pipeline candidate during July R&D day with pipeline-in-a-
product potenal in neuromuscular indicaons.
• Cusatuzumab (an-CD70):
•
Regained worldwide rights to cusatuzumab from Cilag GmbH Internaonal,
one of the Janssen Pharmaceucal Companies of Johnson & Johnson (Cilag),
and started evaluaon process for potenal alternaves to advance program
through partnership.
Cusatuzumab
Efgartigimod
Corporate Achievements
ARGX-117
ARGX-119
argenx expanded to 650 employees (per December 31, 2021) to
support growth of business, including fully staed commercial teams
in the U.S. and Japan.
Appointed Karl Gubitz as Chief Financial Ocer. Prior to joining argenx,
Mr. Gubitz was Vice President of Finance within the Global Oncology
business of Pzer.
Chief Medical Ocer Wim Parys, M.D. announced plans to rere on
March 31, 2022 and argenx announced that Luc Truyen, M.D., Ph.D.,
Vice President of Research & Development Operaons is to assume the
role of Chief Medical Ocer. Prior to joining argenx, Dr. Truyen was the
Global Head of Development and External Aairs – Neuroscience at
Johnson & Johnson.
650
Employees
Karl Gubitz
Wim Parys
20 | Collaborations Financial Highlights | 21
Collaborations
• Announced exclusive partnership agreement with Zai Lab Limited (
Zai Lab
)
under which we received a total of $175 million in collaboraon payments
in 2021 to develop and commercialize efgargimod in Greater China.
• Iniated collaboraon and license agreement with Elektro, Inc. (
Elektro
)
to explore new SC formulaons for current and future pipeline candidates.
• Announced exclusive partnership agreement with Medison Pharma Ltd.
(
Medison
) for the commercializaon of efgargimod in gMG in Israel.
Financial Highlights
$2.3
billion
$1.15
billion
$348.7
million
$408.3
million
Cash
Cash posion of $2.3 billion (cash, cash-equivalents
and current nancial assets) enabling execuon of
our ambious strategy objecves.
Operating Income
Operang income $348.7 million.
Loss
Loss $408.3 million.
Raised
Raised $1.15 billion in gross proceeds in global oering
of 3,593,750 ordinary shares (including ordinary shares
represented by American Depositary Shares (ADSs)),
which included the full exercise of the underwriters’
opon to purchase 468,750 addional ADSs.
2022
Outlook
Global Efgartigimod Launch
22 | 2022 Outlook Global Efgartigimod Launch | 23
With the approval of VYVGART™ as the first-and-only
approved neonatal Fc receptor (FcRn) blocker in the U.S and
Japan, we enter 2022 in a strong position to execute on our
plans for a global launch and advance our pipeline of assets,
including further efgartigimod development, across our
four commercial franchises in neuromuscular, hematology,
dermatology and nephrology.
ARGX-117
Efgartigimod
ARGX-113
• EMA decision expected in the second half of 2022.
• argenx Canada was established in rst quarter of 2022 in preparaon for a
potenal Health Canada approval request and, if granted, commercial launch
in Canada.
• Zai Lab on track to le for approval in Greater China of efgargimod by mid-2022.
• Addional distribuon partnership agreements for other territories expected
to be announced in 2022 that would expand global paent reach.
Pipeline of Dierentiated
Antibody Candidates
24 | Pipeline of Dierentiated Antibody Candidates Pipeline of Dierentiated Antibody Candidates | 25
ARGX-117
ARGX-119
kidney transplantaon.
• Phase 1 dose-escalaon trial of ARGX-119 to start aer Clinical Trial Applicaon
ling in fourth quarter of 2022.
During our July 2021 R&D Day, we introduced our long-term ‘argenx 2025’ vision to
becoming a global, integrated immunology company including the following goals:
• First, we hope to make efgargimod globally available to paents across our
expanding commercial franchises.
• Second, we aspire to make efgargimod either commercially available or in clini
-
cal development in een acve indicaons.
• Third, we plan to make progress across our broader immunology pipeline with
ARGX-117 in mulple late-stage trials and demonstrate proof-of-concept with
ARGX-119.
• Fourth and nally, we will invest in the connued expansion of our dierenated
pipeline through the IIP and aim to connue to generate one new asset into the
pipeline each year.
• Topline data from four registraonal trials of efgargimod expected across four
indicaons, including gMG, ITP, PF and PV, and CIDP:
•
ADAPT-SC: Topline data of SC efgargimod for gMG expected in rst quarter of
2022.
•
ADHERE: Topline data of SC efgargimod for CIDP expected in rst quarter of
2023.
•
ADVANCE: Topline data of intravenous efgargimod for primary ITP expected
in second quarter of 2022.
•
ADVANCE-SC: Topline data of SC efgargimod for primary ITP expected in rst
quarter of 2023.
•
ADDRESS: Timing of topline data of SC efgargimod for PF and PV is currently
under review given the geopolical events in Ukraine.
• ALKIVIA registraonal trial of SC efgargimod for myosis to start in second
quarter of 2022.
• Clinical trials to start in 2022 in four addional indicaons through partnership
agreements with Zai Lab and IQVIA LTD (
IQVIA
):•
Zai Lab to launch proof-of-concept trials in two kidney indicaons, lupus ne
-
phris (LN) and membranous nephropathy (
MN
).•
IQVIA to launch proof-of-concept trials in primary Sjögren’s syndrome (
SjS
) in
second half of 2022 and COVID-19-mediated postural orthostac tachycardia
syndrome (
POTS
) in mid-2022.• Phase 2 trial of ARGX-117 for delayed gra funcon and/or allogra failure aer
1
Presentation
of the Group
Contents
1.1
Company Prole
30
1.2
Strategy and objecves
34
1.3 Our Products and Product Candidates 38
1.4
Collaboraon Agreements
56
1.5 License Agreements 60
1.6
Distribuon Agreements
66
1.7 Manufacturing and Supply 66
1.8 Intellectual Property 66
1.9 Regulaon 72
PART I
Co-Creation
We create through
collaboraon.
Humillity
We listen to paents and
their communies.
Excellence
We live by our reputaon for
data-driven decision-making.
Empowerment
We build our people based on strengths
to benet the broader team.
Innovation
We live to innovate and
do so at every step.
We thrive on curiosity and trust in the power of the team to help us idenfy immunology
breakthroughs. We are inspired by paents to translate these breakthroughs into medicines.
The resilience and hope of paents gives us purpose, empowering us to work with urgency
because we know they are waing.
Our values guide our business relationships and
collaborations both within and beyond our walls.
Our
Values
PART I
28 | Our Values Our Values | 29
1 Presentation
of the group
1.1 Company Profile
1.1.1 General
We are a commercial-stage, global, fully-integrated biotechnology company developing a deep pipeline of dierenated ther
-
anbody-based medicines through our discovery engine, the Immunology Innovaon Program (
IIP
). We have a parcular focus the building and use of commercial franchises, we plan to leverage capabilies and an organizaonal footprint for subsequent
potenal launches across our broad immunology pipeline. On December 17, 2021, the FDA approved efgargimod, which will
be marketed as VYVGART™ (efgargimod alfa-fcab), for the treatment of gMG in adult paents who are AChR anbody posive.
On January 20, 2022, the Japan PMDA approved VYVGART™ (efgargimod alfa) for the treatment of adult paents with gMG
who do not have sucient response to steroids or non-steroidal ISTs. With these regulatory milestones, VYVGART™ is the rst-
and-only approved neonatal FcRn blocker in the U.S and Japan.
argenx is a Dutch European public company (Societas Europaea) with its statutory seat in Roerdam, the Netherlands.
argenx is registered with the trade register of the Dutch Chamber of Commerce under number 24435214. argenx’s
registered oce is at Willemstraat 5, 4811 AH, Breda, the Netherlands. argenx was incorporated on April 25, 2008 in
the Netherlands and under Dutch law. Its commercial name is “argenx” and, since April 26, 2017, its corporate name is
“argenx SE”. argenx has a one-er governance structure consisng of an execuve director and non-execuve directors.
The ordinary shares in argenx are listed on the regulated market of Euronext Brussels in Belgium under ISIN
NL0010832176 under the symbol “ARGX”. argenx’s ADSs, each represenng one ordinary share in argenx (or a right
to receive such share), are listed on the Nasdaq Global Select Market (Nasdaq) under the symbol “ARGX”.
argenx is the top enty of the Group and the sole shareholder of
• argenx IIP BV, a private company with limited liability (
besloten vennootschap
) incorporated under the laws of Belgium, having its registered seat in Zwijnaarde, Belgium and its address at Industriepark-Zwijnaarde 7, 9052
Zwijnaarde, Belgium and
• argenx BV, a private company with limited liability (
besloten vennootschap
) incorporated under the laws of Belgium, having its registered seat in Zwijnaarde, Belgium and its address at Industriepark-Zwijnaarde 7, 9052 Zwijnaarde,
Belgium. argenx BV is the sole shareholder of
•
argenx US Inc, incorporated under the laws of Delaware, U.S., having its registered oce in Wilmington, Delaware
and its address at 33 Arch Street, Boston, Massachuses 02110;
•
argenx Japan K.K., incorporated under the laws of Japan, having its registered oce in Tokyo, Japan and its address
at HULIC JP Akasaka Building 2-5-8, Akasaka, Minato-ku, Tokyo, 107-0052, Japan;
•
argenx Switzerland SA, incorporated under the laws of Switzerland, having its registered oce in Geneva, Switzerland,
and its address at Route de Chêne 30, 1208 Geneva, Switzerland;
•
argenx France SAS, incorporated under the laws of France, having its registered oce in Paris, France, and its ad
-
dress at rue Camille Desmoulins 13, 92130 Issy Les Moulineaux, France;
•
argenx Germany GmbH, incorporated under the laws of Germany, having its registered oce in Munich, Germany,
and its address at Konrad-Zuse-Platz 8, 81829 Munich; and
•
argenx Canada Inc., incorporated under the laws of Canada, having its registered oce in Toronto, Canada and its
address at 19 Toulon Crescent, Vaughan, Ontario, Canada, L4H 2X3.
The following chart provides with an overview of the Group as of December 31, 2021 and on the date of this Universal
Registraon Document. Percentages refer to both the share of capital and vong rights.
1.1.2 History
We were founded on April 25, 2008 as arGEN-X B.V. as a company with limited liability (
besloten vennootschap
) incor
-
porated under the laws of the Netherlands, having its registered seat in Breda, the Netherlands. On May 28, 2014, the
company was converted into a public limited company (
naamloze vennootschap
) with the legal name arGEN-X N.V, in preparation of our initial public offering. Since the successful initial public offering on July 10, 2014, our shares are list
-
ed on the regulated market of Euronext Brussels. On April 28, 2016, we changed our legal name to argenx N.V. to align
with our logo and tradename. On April 26, 2017, the company was converted into a Dutch European public company
(
Societas Europaea
or SE) with the legal name argenx SE, followed by the successful initial public offering of our ADSs
on Nasdaq in New York.
On August 28, 2009, our rst subsidiary argenx BV was incorporated in Belgium and on August 5, 2020, our subsidiary
argenx IIP BV was incorporated also in Belgium.
On December 17, 2021, our rst product VYVGART™ for the treatment of gMG in the U.S. was approved by the FDA,
moving us forward from a clinical-stage to a commercial-stage biotechnology company. On January 20, 2022, VYVGART™
for the treatment of gMG was approved in Japan.
1.1.3 Overview
Our Pipeline
•
Efgargimod (FcRn blocker)
: Efgargimod is a human IgG1 Fc fragment that is designed to target the FcRn and reduce
immunoglobulin G (
IgG
). FcRn is foundaonal to the immune system and funcons to recycle IgG, extending its serum half-life over other immunoglobulins that are not recycled by FcRn. IgGs that bind to FcRn are rescued from lysosomal.
By binding to FcRn, efgargimod can reduce IgG recycling and increase IgG degradaon. It has the potenal to address
a multude of severe autoimmune diseases where pathogenic IgGs are believed to be mediators of disease.
•
gMG: In May 2020, we announced positive topline results from the Phase 3 ADAPT trial of intravenous (
IV
),
efgargimod for the treatment of gMG. The topline results from the ADAPT trial showed that efgargimod was
well-tolerated, demonstrated clinically meaningful improvements in strength and quality of life measures, and
30 | Company Profile Company Profile | 31
PART I
(*) argenx Canada Inc. was incorporated on February 14, 2022.
provided the opon of an individualized dosing schedule for gMG paents. The full Phase 3 ADAPT results were pub
-
lished in The Lancet Neurology in July 2021. The data from the ADAPT trial and the subsequent open-label extension
(ADAPT+) formed the basis for the regulatory approvals of VYVGART™ in the U.S. (December 17, 2021) and Japan
(January 20, 2022).
•
Registraonal trials are ongoing in four addional autoimmune indicaons with an addional registraonal trial to
start in the second quarter of 2022:
−
ITP: The ADVANCE trial of IV efgargimod was iniated in the fourth quarter of 2019 and topline data are expect
-
ed in the second quarter of 2022. The ADVANCE-SC trial of SC efgargimod started in the fourth quarter 2020 and
topline data are expected in the rst quarter of 2023.
−
PV and PF: The ADDRESS trial of SC efgargimod was iniated in 2020. Timing of topline data is currently under
review given the geopolical events in Ukraine.
−
CIDP: The ADHERE trial of SC efgargimod was iniated at the end of 2019 and topline data are expected in the
rst quarter of 2023.
−
BP: The BALLAD trial of SC efgargimod was iniated at the end of 2021 and an interim analysis is planned of paents.
−
myosis: The ALKIVIA trial of SC efgargimod will iniate in the second quarter of 2022.
•
Clinical trials to start in 2022 in four addional autoimmune indicaons through partnership agreements with Zai
Lab and IQVIA:
−
Zai Lab to launch proof-of-concept trials in two kidney indicaons, LN and MN.
−
IQVIA to launch proof-of-concept trials in primary SjS in second half of 2022 and COVID-19-mediated POTS in
mid-2022.
•
ARGX-117 (C2 inhibitor)
: ARGX-117 is a novel complement inhibitor targeng complement component 2 (
C2
), block-
ing funcon of both the classical and lecn pathways while leaving the alternave pathway intact. ARGX-117 has the
potenal to be a pipeline-in-a-product candidate with indicaons that t within our four commercial franchises.
•
Phase 1 data of ARGX-117 were reported in July 2021 showing a favorable safety prole across single and mulple
ascending doses of both IV and SC formulaons. Pharmacokinec (
PK
) and pharmacodynamic (PD
) proles demon-
strated potenal for infrequent dosing schedules.
•
First Phase 2 proof-of-concept trial started at end of 2021 in MMN with second Phase 2 proof-of-concept trial to
start in 2022 in delayed gra funcon and/or allogra failure aer kidney transplantaon.
•
ARGX-119 (MusK agonist)
: ARGX-119 is an agonist SIMPLE Anbody™ to the muscle-specic kinase (
MuSK
) receptor with potenal in mulple neuromuscular indicaons. Phase 1 dose-escalaon trial to start aer Clinical Trial Applica
-
on ling in fourth quarter of 2022.
•
ARGX-118 (Galecn-10)
: ARGX-118 is an anbody against Galecn-10, the protein of Charcot-Leyden crystals which are
implicated as a major contributor to airway inammaon and to the persistence of mucus plugs.
•
Cusatuzumab (An-CD70 Anbody)
: Cusatuzumab is an an-CD70 monoclonal anbody. CD70, a tumor necrosis factor
receptor ligand, and its receptor CD27 are expressed on leukemic stem cells and acute myeloid leukemia (
AML
) blasts but not on hematopoiec stem cells.
•
In June 2021, we regained global rights to cusatuzumab from Cilag following the terminaon of a collaboraon and
licensing agreement to develop cusatuzumab in AML and myelodysplasc syndromes (
MDS
)
•
We connue to evaluate potenal alternaves to advance cusatuzumab through partnership
•
In addion to our wholly-owned pipeline, we have candidates that emerged from the IIP that have been out-licensed
to a partner for further development and for which we have milestone, royalty or prot-share agreements. These
candidates include:
•
ARGX-109 (GB224), a SIMPLE Anbody™ inhibitor of IL-6 and out-licensed to Genor BioPharma
•
ARGX-112 (LP-0145), a SIMPLE Anbody™ inhibitor of IL-22R and out-licensed to LEO Pharma
•
ARGX-114 (AGMB-101), a SIMPLE Anbody™ agonist to the MET receptor and out-licensed to AgomAb Therapeucs
•
ARGX-115 (ABBV-151), a SIMPLE Anbody™ inhibitor of GARP-TGF-b1 and out-licensed to AbbVie
•
ARGX-116 (STT-5058), a SIMPLE Anbody™ inhibitor of ApoC3 and out-licensed to Staten Biotechnology
Immunology Innovaon Program
Our IIP is a core business strategy of co-creaon and innovaon. The IIP also serves as our discovery engine to idenfy
novel targets and together, in collaboraon with our scienc and academic partners, to build potenal new pipeline
candidates. Every current pipeline candidate from both our wholly-owned and partnered pipeline emerged from an IIP
collaboraon. As part of our long-term strategy, we have commied to connued investment in the IIP. As at the date of
this Universal Registraon Document, we have executed on our commitment and aim to connue to bring forth at least
one new asset per year from the IIP.
Examples of key collaboraons with scienc and academic partners:
• Efgargimod emerged from a collaboraon with Professor Sally Ward and UT Southwestern that later became one
of the blueprints for our IIP. Professor Ward’s research idened the crucial role that FcRn plays in maintaining and
distribung IgGs throughout the body, in 2013. Efgargimod is a human IgG1 Fc fragment that is equipped with ABDE
-
GTM mutaons, which we in-licensed from UT Southwestern. These proprietary mutaons modied efgargimod to
increase its anity for FcRn while retaining the pH-dependent binding that is characterisc of FcRn interacons with its
natural ligand, endogenous IgG.
• ARGX-117 was built in collaboraon with Broteio Pharma which was launched in 2017 with support from Professor Erik
Hack and the University of Utrecht, to conduct research to demonstrate preclinical proof-of-concept of the mecha
-
nism of ARGX-117. Professor Hack has done renowned research in the role of inammaon in disease, specically in
the complement system, and has contributed research and experse to the approval of two complement inhibitors.
His understanding of the mild phenotype associated with a natural C2 deciency and C2’s unique posioning at the
juncon of the classical and lecn pathways led to our interest in engineering ARGX-117, which is equipped with our
proprietary NHANCE™ mutaons and LALA mutaons.
Our Suite of Technologies
Through our IIP, we collaborate with scienc and academic partners to idenfy immunology breakthroughs and build
potenal pipeline candidates. This is done through co-creaon where we bring to the collaboraon our unique suite of
anbody engineering technologies and experience in clinical development and our partners bring a wealth of disease and
target biology experse.
•
SIMPLE Antibody
TM
platform: Our proprietary SIMPLE Antibody
TM
platform, based on the powerful llama immune
system, allows us to exploit novel and complex disease biology targets. The platform sources antibody V-regions
from the immune system of outbred llamas, each of which has a different genetic background. The llama produces
highly diverse panels of antibodies with a high human homology, or similarity, in their V-regions when immunized
with targets of human disease. Our SIMPLE Antibody
TM
platform allows us to access and explore a broad target uni
-
verse while potentially minimizing the long timelines associated with generating antibody candidates using
traditional methods.
•
NHance®
,
ABDEGTM,
POTELLIGENT®, and
DHS
mutaons focus on engineering the Fc region of anbodies in order to augment their intrinsic therapeuc properes. In addion, we obtained a non-exclusive research license and opon
from Chugai for the
SMART-Ig®
and
ACT-Ig® technologies. These technologies are designed to enable us to expand
the therapeuc index of our product candidates, which is the rao between toxic and therapeuc dose, by potenally
modifying their half-life, ssue penetraon, rate of disease target clearance and potency.
• Halozyme’s
ENHANZE®
SC drug delivery technology: we have exclusive access to ENHANZE® for the FcRn and C2 targets and four addional targets. The global collaboraon and license agreement with Halozyme was announced in February
2019 and extended in October 2020. The ENHANZE® technology has the potenal to shorten drug administraon me,
reduce healthcare praconer me, and oer addional exibility and convenience for paents.
1.1.4 Recent Developments
On February 21, 2022, Russia announced that it proposed to recognise the so-called Donetsk People’s Republic and
Lugansk People’s Republic as independent republics and on February 24, 2022, Russia further announced the commence
-
ment of what it described as a “special military operaon” in Ukraine. Since such announcement, Russian forces have en
-
tered Ukraine and, as at the date of this Universal Registraon Document, there is an ongoing military conict in Ukraine.
In connecon with these events, new sancons have been imposed by the U.S. and European Union, as well as many
other countries around the world, on certain Russian companies and Russian individuals, with the nature and extent of
these sancons evolving on an ongoing basis.
This ongoing conict between Russia and the Ukraine has a direct, limited impact on our operaons, given that we are
32 | Company Profile Strategy and objectives | 33
PART I
conducng clinical trials in a large number of jurisdicons, including Russia and Ukraine. Due to the conict, we are
in some cases unable to ship samples from research sites to our third party central laboratory for analysis, recruited
paents may no longer be able to parcipate in our clinical trials, and dicules with recruing paents in Russia and
Ukraine might have an indirect limited impact on our business acves as we seek alternave recruitment opons. Study
data collected at Russian or Ukrainian sites may not be t for submission due to incompleteness or due praccal limita
-
ons on auditability of the data. At this me we do not expect a material negave impact on our operaons as a result of
the crisis, but we do expect ming of topline data for the ADDRESS trial of SC efgargimod for PF and PV may be delayed,
although we currently cannot assess if this is the case and how signicant such delay could be. We connue to assess the
developments on a daily basis.
We do not generate revenues in Russia or the Ukraine and we do not expect the conict as known to us at the date of
this Universal Registraon Document to have a material impact on our future sales. Our supply chains have been directly
aected in some cases, where we are unable to ship study drug to clinical sites, but as we are not supplying from Russia
or the Ukraine but only to these countries for ongoing development acvies, we expect the impact will be limited to
ongoing clinical studies in these countries. In addion, we expect an overall increase in prices caused by the conict and
global inaon.
Our economic performance is, at the date of this Universal Registraon Document, not directly impacted by the conict.
We currently expect the addional costs for any delays and the opening of addional trial sites to be relavely limited
and not material to our overall nancial performance.
1.2 Strategy and objectives
1.2.1 Company’s Strategies
Our goal is to deliver therapies that are either rst-in-class or best-in-class to paents suering from neuromuscular,
hematology, dermatology and nephrology indicaons for which a signicant unmet medical need exists. We focus on
aaining this goal in a manner that is disciplined for a company of our size. We plan to:
•
Execute our global launch.
With the approval of VYVGART™ as the rst-and-only approved neonatal FcRn blocker in
the U.S and Japan, we have already taken the rst steps in execung our plans for a global launch for VYVGART for
the treatment of gMG. We expect EMA decision on approval in the second half of 2022 and aim for further approv
-
als in other jurisdicons in the course of the year. We have already built our commercial infrastructure to support
the launch of VYVGART™ in the U.S. and in Japan as well as build out addional commercializaon infrastructure to
support a rapidly growing number of indicaons in our key territories, the U.S., Europe and Japan.
•
Expand applicaons for our lead product efgargimod.
Our goal is to maximize the commercial potenal of our
exisng products and product candidates by exploring addional indicaons, as well as formulaons that may expand
the target paent populaons within exisng indicaons. We are further developing our lead product, efgargimod,
to market regulatory approval for the treatment of gMG, ITP, PV, CIDP, BP, myosis, COVID-19 mediated POTS, SjS, MN
and LN. By the end of 2024, we aim to be ready for four addional commercial launches of gMG (with SC efgargimod),
ITP, PV and CIDP. We expand the use of our products and product candidates in exisng indicaons by developing new
formulaons, such as a subcutaneous version of efgargimod, that may reach more paent groups by capturing dier
-
ent paent preferences and providing addional oponality with regards to dosing.
•
Advance our pipeline of assets.
In addion to new indicaons for efgargimod, we plan to advance our other product
candidates. In parcular, we plan to advance the clinical development of ARGX-117 in mulple Phase 2 proof of con
-
cept trials in MMN and delayed gra funcon in the context of kidney transplant; to advance ARGX-119 and early-stage
pipeline candidates in our commercial franchises, the neuromuscular, hematology, dermatology and nephrology fran
-
chises; and to expand our pipeline of future product candidates through the IIP.
•
Leverage our suite of technologies to seek strategic collaboraons and maximize the value of our pipeline.
Our suite
of technologies and producve discovery capabilies have yielded several potenal product candidates for which we
seek to capture value, while maintaining our focus and discipline. We plan to collaborate on product candidates that
we believe have promising ulity in disease areas or paent populaons but fall outside our commercial franchises or
are beer served by the resources of larger biopharmaceucal companies. In addion to collaborang on our products
and product candidates, we may also elect to enter into collaboraons for access to partner technology plaorms or
capabilies from which we can develop dierenated potenal pipeline assets.
•
Implement our “argenx 2025” vision.
We hope to make efgargimod globally available to paents across our expand
-
ing commercial franchises. We aspire to make efgargimod either commercially available or in clinical development
in een acve indicaons. We plan to make progress across our broader immunology pipeline with ARGX-117 in
mulple late-stage trials and demonstrate proof-of-concept with ARGX-119. Finally, we will invest in the connued ex
-
pansion of our dierenated pipeline through the IIP and aim to connue to generate one new asset into the pipeline
each year.
•
Connue to build innovaon into every step of our development, highlighted by our collaborave IIP translang
immunology breakthroughs into medicines.
The IIP is our core business strategy connecng the specialized insight
into disease and target biology of our external scienc and academic collaborators with our unparalleled experience
as anbody engineers. Co-creaon has led to a deep pipeline of highly dierenated product candidates. Through the
IIP, we hope to together transcend breakthrough research and publicaons to our ulmate and unifying mission of
creang new potenal treatment opons for paents.
1.2.2 Trends
Other than as disclosed in chapter 1 “Presentaon of the Group”, 2 “Risk Factors” and 3 “Sustainability at argenx” in this
Universal Registraon Document, we are not aware of any trends, uncertaines, demands, commitments or events for
the current nancial period that are reasonably likely to have a material eect on our net revenues, income, protability,
liquidity, capital resources or prospects, or that caused the disclosed nancial informaon to be not necessarily indicave
of future operang results or nancial condions.
Following the approval of VYVGART™ for the treatment of gMG in the U.S. by the FDA on December 17, 2021, we transi
-
oned from a clinical-stage to a commercial-stage biotechnology company and are working on the ongoing launch of the
commercializaon of VYVGART™.
There has been no signicant change in the nancial performance or the nancial posion of the Group since the balance
sheet date of December 31, 2021 up to the date of this Universal Registraon Document.
For more informaon, please refer to chapter 2 “Risk Factors”, chapter 1 “Presentaon of the Group” and to note 29
“Commitments” of our consolidated nancial statements in chapter 7 “Consolidated Financial Statements – audited as of
and for the years ended December 31, 2021, 2020 and 2019”.
1.2.3 Competitive position
We parcipate in a highly innovave industry characterized by a rapidly growing understanding of disease biology, quickly
changing technologies, strong intellectual property barriers to entry, and a multude of companies involved in the
creaon, development and commercializaon of novel therapeucs. These companies are highly sophiscated and oen
strategically collaborate with each other.
We compete with a wide range of pharmaceucal companies, biotechnology companies, academic instuons and
other research organizaons for novel therapeuc anbody targets, new technologies for opmizing anbodies, talent,
nancial resources, intellectual property rights and collaboraon opportunies. Many of our competors and poten
-
al competors have substanally greater scienc, research and product development capabilies as well as greater
nancial, manufacturing, markeng and sales and human resources than we do. In addion, there is intense compeon
for establishing clinical trial sites and registering paents for clinical trials. Many specialized biotechnology rms have
formed collaboraons with large, established companies to support the research, development and commercializaon
of products that may be compeve with ours. Accordingly, our competors may be more successful than we may be in
developing, commercializing and achieving widespread market acceptance.
34 | Strategy and objectives Strategy and objectives | 35
PART I
36 | Strategy and objectives
Compeon in the autoimmune eld is intense and involves mulple monoclonal anbodies, other biologics and small
molecules either already marketed or in development by many dierent companies including large pharmaceucal com
-
panies such as AbbVie Inc. (Humira/rheumatoid arthris); Amgen Inc. (Enbrel/rheumatoid arthris); Biogen, Inc. (Tysabri/
mulple sclerosis); GlaxoSmithKline plc (
GSK
) (Benlysta/lupus); F. Homan-La Roche AG (Roche
) (Rituxan/oen used o la-
bel); and Janssen (Remicade/rheumatoid arthris and Stelera/psoriasis). In addion, these and other pharmaceucal com
-
panies have monoclonal anbodies or other biologics in clinical development for the treatment of autoimmune diseases.
In addion to the current standard of care, we are aware that AstraZeneca PLC is selling Soliris for the treatment of adult
paents with gMG who are AChR anbody posive and that GSK, Roche, Novars AG, CSL Behring, Grifols, S.A., BioMarin
Pharmaceucal Inc., Curavac, UCB S.A./RA Pharma, DAS Therapeucs, Takeda, RemeGen, Immunovant, Cartesian Thera
-
peucs, Horizon Therapeucs, AstraZeneca PLC, Chugai Pharma/Genentech, Regeneron/Alnylam and Johnson & Johnson
Innovaon Inc., among others, are developing drugs that may have ulity for the treatment of MG. Compeon for other
(potenal) future indicaons is also erce, with signicant development acvies in almost all of the indicaons where
we are currently developing or planning to develop our product or product candidates.
1.2.4 Our Competitive Strengths
We believe that the combinaon of our technologies, experse and focus will enable us to overcome many of the chal
-
lenges associated with anbody drug development and posions us to be a leader in delivering therapies to paents
suering from severe autoimmune, neuromuscular, hematology, dermatology and nephrology diseases for which the
current treatment paradigm is inadequate.
Producve discovery capabilies through our IIP fuel a deep pipeline of clinical and preclinical product candidates. We are
advancing a deep pipeline of both clinical- and preclinical-stage product candidates for the treatment of severe autoimmune
diseases. Leveraging our technology suite and clinical experse, we have advanced several candidates and believe this level
of producvity aords us a breadth of opons with regard to independently advancing or partnering our pipeline assets.
In November 2020, we announced the agreement to acquire an FDA Priority Review Voucher (
PRV
) from Bayer Health-
care Pharmaceucals, Inc. for $98 million. A PRV entles the holder to FDA priority review of a single new drug applica
-
on or biologic license applicaon (
BLA
), which reduces the target review me and may potenally lead to an expedited approval. We expect to redeem the PRV for a future markeng applicaon for efgargimod for another indicaon.
CIDP Patient | 37
CIDP
Patient
Kelly
“ All I have ever wanted is to
help provide a voice for those who do not
have one and to offer support to patients
like me. I am so fortunate to have found
myself at the GBS|CIDP Foundation in
a role that does just that.’’
1.3 Our Products and Product Candidates
The following table summarizes key informaon on our porolio of lead product and product candidates as of the date of
this URD.
1.3.1 VYVGART™
Approval
On December 17, 2021, the FDA approved VYVGART™ (efgargimod alfa-fcab) for the treatment of gMG in adult paents
who are AChR anbody posive. These paents represent approximately 85% of the total gMG populaon (Behin et
al. New Pathways and Therapeucs Targets in Autoimmune Myasthenia Gravis. J Neuromusc Dis 5. 2018. 265-277). On
January 20, 2022, Japan’s PMDA approved VYVGART™ (efgargimod alfa) for the treatment of adult paents with gMG
who do not have sucient response to steroids or non-steroidal ISTs. With these regulatory milestones, VYVGART™ is the
rst-and-only approved neonatal FcRn blocker in the U.S. and Japan.
gMG is a rare and chronic neuromuscular disease characterized by debilitang and potenally life-threatening muscle
weakness. VYVGART™ is a human IgG1 anbody fragment that binds to FcRn, resulng in the reducon of circulang IgG
anbodies. The acon of AChR autoanbodies at the neuromuscular juncon is a key driver of gMG (Howard JF Jr, Ut
-
sugisawa K, Benatar M, et al. Safety and ecacy of ecacy of eculizumab in an-acetylcholine receptor anbody-posive
refractory generalised myasthenia gravis (REGAIN): a phase 3, randomised, double-blind, placebo-controlled, mulcenter
study. Lancet Neurol. 2017; 16: 976-86).
The approval of VYVGART™ is based on results from the global Phase 3 ADAPT trial, which were published in the July
2021 issue of The Lancet Neurology.
Input from the gMG community was integrated into the ADAPT trial design. Through listening to and learning from the
gMG paent community, we understood that every gMG paent experiences the course of disease dierently. As a result,
we designed a trial to reect the individualized nature of gMG with a dosing approach that would be adapted to each
paent’s individual response.
The Phase 3 ADAPT trial was a randomized, double-blind, placebo-controlled, mul-center, global trial evaluang the
safety and ecacy of efgargimod in paents with gMG. A total of 167 adult paents with gMG in North America,
Europe and Japan enrolled in the trial and were treated. Paents were eligible to enroll in ADAPT regardless of anbody
status, including paents with AChR anbodies (AChR-Ab+) and paents where AChR anbodies were not detected.
Paents were randomized in a 1:1 rao to receive efgargimod or placebo for a total of 26 weeks. ADAPT was designed
to enable an individualized treatment approach with an inial treatment cycle followed by a variable number of subse
-
quent treatment cycles.
The ADAPT trial met its primary endpoint, demonstrang that signicantly more an-AChR anbody posive gMG pa
-
ents were responders on the MG-ADL scale following treatment with VYVGART™ compared with placebo (68% vs. 30%;
p<0.0001). Responders were dened as having at least a two-point reducon on the MG-ADL scale sustained for four or
more consecuve weeks during the rst treatment cycle.
Addionally, there were signicantly more responders on the quantave myasthenia gravis (
QMG
) scale following treatment with VYVGART™ compared with placebo (63% vs. 14%; p<0.0001). Responders were dened as having at least
a three-point reducon on the QMG scale sustained for four or more consecuve weeks during the rst treatment cycle.
As shown in gure 1, minimal symptom expression (
MSE
) is an increasingly important data point for physicians and pa-
ents because it is a measure of symptom-free status. In ADAPT, 40% of paents achieved MSE – or an MG-ADL score of
0 or 1 - at any me during cycle one. The right side shows depth of response. Over half of paents treated with efgargi
-
mod experienced an improvement of ve points or more on the MG-ADL scale by week four.
38 | Our Products and Product Candidates Our Products and Product Candidates | 39
PART I
Figure 1: Percentage of paents with MG-ADL and QMG total score change four weeks aer inial infusion of the rst cycle in AChR-Ab posive populaon.
VYVGART
Placebo
VYVGART
Placebo
0
5
10
15
20
25
30
≥10 9 8 7 6 5 4 3 2 1
No
Change
Worsening
Improvements in Total QMG at Week 4
Percent
26%
0% 0% 0%
3% 3% 3%
2%
8% 8%
7% 7%
5% 5% 5%
6%
5%
10%10%
19%
24% 24%
10% 10%
0
5
10
15
20
≥9 8 7 6 5 4 3 2 1
No
Change
Worsening
14%
0%
2% 2%
6% 6%
5% 5% 5% 5%
15%
17%
3%
8%
13%
16%
12% 12%
13%
20%
13%
10%
Improvements in Total MG-ADL at Week 4
Percent
Autoi
mm
une PipelineProgram Indica P Phase 1 Pr Co
ti
onre
clinicaloo
f of ConceptRe
gistrati
onalmm
cialer
Upd
at
eVYVGART
gMG
US Launch
O
ngoi
ngEfgartigimod
gMG
Data 1Q22
CIDP
Data 1Q23
Myo
si
tisTri
al to
initiate 1Q22
Pemphigus
Data 4Q22
Bu
llo
us Pemphigo
idEn
ro
ment Ongll
oi
ngITP
Data 2Q22
ITP
Data 1Q23
Membr
an
ous NephropathyPOC t
ri
al to start in
2022L
upu
s Nephritis
POC t
ri
al to start in
2022Sj
og
ren's Syn
dromePOC t
ri
al to start in 2H22COVID-19 Media
te
d Postural Orthostatic Ta
chy
cardia S
yn
dromePOC t
ri
al to start in mid-2022ARGX-
11
7Multifocal Motor Neuropathy
En
ro
ment Ongll
oi
ngD
el
ayed Graft Fun
ction Afte
r Kidney Trans
plan
tPOC t
ri
al to start in
2022ARGX-
11
9Neuromuscular Indications
Ph
as
e 1 to start in
2022ARGX-120
Undisc
lo
sedNo
n-Autoi
mmune Programs
Cu
satuzumab
AML
ARGX-
11
8Airway Inflamm
at
ionNEUR HEM NEPHROLOGYKey:
OM
USCULARAT
OLOGYDE
RMAT
OLOGYAutoi
mm
une PipelineProgram Indica P Phase 1 Pr Co Upd
ti
onre
clinicaloo
f of ConceptRe
gistrati
onalmm
cialer
at
eVYVGART
gMG
US Launch
O
ngoi
ngEfgartigimod
g
MG
Data 1Q22
C
IDP
Data 1Q23
M
yo
si
tisTri
al to
initiate 1Q22
P
emphigus
Data 4Q22
B
u
llo
us Pemphigo
idEn
ro
ment Ongll
oi
ngI
TP
Data 2Q22
I
TP
Data 1Q23
M
embr
an
ous NephropathyPOC t
ri
al to start in
2022L
upu
s Nephrit
is
POC t
ri
al to start in
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j
og
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dromePOC t
ri
al to start in 2H22C
OVID-19 Media
te
d Postural Orthostatic Ta
chy
cardia S
yn
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POC t
ri
al to start in mid-2022ARGX-
11
7Multifocal Motor Neuropathy
En
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ment Ongll
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ngD
el
ayed Graft Fun
ction Afte
r Kidney Trans
plan
tPOC t
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al to start in
2022ARGX-
11
9Neuromuscular Indications
Ph
as
e 1 to start in
2022ARGX-120
Undisc
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sedNo
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mmune Programs
Cu
satuzumab
AML
ARGX-
11
8Airway Inflamm
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USCULARAT
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VYVGART™ had a demonstrated safety prole in the ADAPT clinical trial. The most common adverse events in ADAPT
were respiratory tract infecon (33% vs 29% placebo), headache (32% vs 29% placebo), and urinary tract infecon (10%
vs. 5% placebo).
There is a pre-approval access program (
PAA
) for gMG paents that remains open in the EU, the United Kingdom, Hong Kong and Canada for eligible paents.
Commercializaon and Regulatory Plans
The U.S. commercial launch for VYVGART™ is ongoing following the December 17, 2021 FDA approval. The Japan com
-
mercial launch of VYVGART™ is intended to start aer the Naonal Health Insurance (
NHI
) drug price lisng, expected approximately 90 days aer the approval on January 20, 2022. We have established our own sales force in the U.S. and
Japan for VYVGART™ for the treatment of gMG. We plan to expand our own sales and markeng capabilies and pro
-
mote our products and product candidates if and when regulatory approval has been obtained in the relevant jurisdic
-
ons. An MAA for efgargimod for the treatment of gMG is currently under review with the EMA with an ancipated
decision in the second half of 2022. argenx Canada was established in rst quarter of 2022 in preparaon for a potenal
Health Canada approval request and if granted commercial launch in Canada.
Development and commercializaon may also be done through collaboraons with third pares. In January 2021, we en
-
tered into an exclusive license agreement with Zai Lab for the development and commercializaon of efgargimod in China,
Taiwan, Hong Kong and Macau. We expect Zai Lab to be able to le for approval in Greater China by mid-2022. Under the
terms of the strategic agreement with Zai Lab, we received a $75 million upfront payment in the form of 568,182 newly is
-
sued Zai Lab shares calculated at a price of $132 per share and a $75 million guaranteed development cost sharing payment
and are entled to a $25 million milestone payment in connecon with FDA approval of VYVGART™. We will also be eligible
for ered royales based on annual net sales of efgargimod in China, Taiwan, Hong Kong and Macau. In October 2021, we
announced an exclusive distribuon agreement with Medison to commercialize efgargimod for gMG in Israel. Medison will
also be responsible for seeking requisite regulatory approvals, and we expect Medison to be able to le for approval in Israel
in the second quarter of 2022. We intend to sign addional distribuon partnerships for other territories.
1.3.2 Efgartigimod (formerly ARGX-113) Development
Mechanism of Acon
As shown in gure 3, efgargimod is a human IgG1 Fc fragment equipped with our ABDEG™ mutaons that is designed
to target the FcRn and reduce IgG. FcRn is foundaonal to the immune system and funcons to recycle IgG, extending
its serum half-life over other immunoglobulins that are not recycled by FcRn. IgGs that bind to FcRn are rescued from
lysosomal. By binding to FcRn, efgargimod can reduce IgG recycling and increase IgG degradaon.
Compared to alternave immunosuppressive approaches, such as B-lymphocyte (
B-cell
), depleng agents, efgargimod acts in a highly selecve manner. At the date of this URD, Efgargimod has been evaluated in over 600 subjects and has
been observed to signicantly reduce concentraons of all IgG subtypes without decreasing levels of other immunoglob
-
ulins or human serum albumin, which is also recycled by FcRn.
In a randomized, double-blind, placebo-controlled rst-in-human
study of 62 healthy volunteers, efgargimod treatment resulted
in rapid and specic clearance of serum IgG levels. Single ad
-
ministraon of efgargimod reduced IgG levels up to 50% while
mulple dosing further lowered IgGs on average by 75% from
baseline. Approximately eight weeks following the last adminis
-
traon, IgG levels returned to baseline. Efgargimod did not alter
homeostas of albumin or immunoglobulins other than IgG and
no serious adverse events as dened by the competent authori
-
es related to efgargimod infusion were observed.
Based on its mechanism of acon in targeng FcRn to selec
-
vely reducing IgGs, efgargimod has the potenal to address
a multude of severe autoimmune diseases where pathogenic
IgGs are believed to be mediators of disease.
At the date of this URD, we are evaluang efgargimod in six
autoimmune indicaons where signicant unmet need exists
despite the availability of commonly used therapies. These in
-
clude gMG, CIDP and myosis within our neuromuscular fran
-
chise; ITP within our hematology franchise; and PV and PF and
BP within our dermatology franchise. In 2022, we announced
that we will expand into four addional autoimmune indica
-
ons, including LN and MN within our nephrology franchise
and primary SjS and post-COVID-19 mediated POTS.
Indicaon Selecon Strategy
In selecng our indicaons for efgargimod, we ulize the following strategy:
• We rst start with a strong, unifying biological raonal. The indicaons in our pipeline are unied in that there exists a
wide range of supporve evidence that demonstrates that each is IgG-mediated. This ranges from published literature,
clinical trials with currently used therapies such as intravenous immunoglobulin (
IVIg
), PLEX, or Rituximab, and other experiments, such as passive transfer models.
• We also look at indicaons where a signicant clinical or commercial opportunity exists. These are disease areas where
there is a signicant unmet need for innovaon as paents are oen not well-managed by current therapies and their
respecve side eects. For example, steroids and ISTs are oen used to treat a multude of autoimmune diseases, but
for the indicaons in our pipeline thus far, these have been observed to be lacking in both safety and tolerability.
• Furthermore, for each indicaon, there is a dened path forward with established precedent for how to run proof-of-
concept and registraonal trials with generally accepted clinical and regulatory endpoints.
• Finally, as we work towards achieving our ‘argenx 2025’ vision, we select indicaons where there is a reasonable t
within our growing neuromuscular, hematology, dermatology, and nephrology franchises.
Formulaons
Overview
We are developing two formulaons of efgargimod to address the needs of paents, physicians, and payors across indi
-
caons and geographies, including IV efgargimod and the ENHANZE® (licensed from Halozyme) SC formulaon.
IV
We conducted a Phase 1 clinical trial in healthy volunteers to evaluate the safety, tolerability, pharmacokinecs, phar
-
macodynamics, and immunogenicity of single and mulple doses of efgargimod. In the rst part of the clinical trial, 30
40 | Our Products and Product Candidates Our Products and Product Candidates | 41
Endosome
Lysosome
Endothelial Cell
Ig
G
AntibodyVYGART
FcRn
-5
-4
-3
-2
-1
0
Placebo
VYVGART
Mean chane (+/-SE)
Week
0 1 2 3 4 5 6 7 8 10
Figure 2: Mean change in total MG-ADL from cycle 1 baseline over me in AChR-Ab posive populaon.
PART I
Figure 3: Efgargimod’s mechanism of acon blocks
the recycling of IgG anbodies and removes them from
circulaon
subjects were randomized to receive a single dose of efgargimod or placebo ranging from 0.2 mg/kg to 50 mg/kg. In
the second part of the clinical trial, 32 subjects were randomized to receive mulple ascending doses of efgargimod or
placebo up to a maximum of 25 mg/kg.
In the mulple ascending dose part of the Phase 1 clinical trial, repeat administraon of both 10 mg/kg and 25 mg/kg of
efgargimod every seven days, four doses in total, and 10 mg/kg every four days, six doses in total, was associated with a
gradual reducon in levels of all four classes of IgG anbodies by 60% to 85%, with 10 mg/kg dose results shown in gure
4. For all doses in the mulple ascending dose part of the Phase 1 clinical trial, we observed the reducon in circulang
IgG anbody levels to persist for more than four weeks aer the last dose with levels below 50% at approximately three
weeks and did not return to baseline levels for more than one month. Pharmacokinec analysis of serum baseline levels
of efgargimod indicates that it has a half-life of approximately three to four days with no drug accumulaon following
subsequent weekly dosing. The prolonged acvity on the levels of IgG anbodies is consistent with the mechanism of
acon of efgargimod and the eect of our proprietary ABDEG™ technology (detailed in secon 1.8.2 “Plaorm Technol
-
ogies”) on increasing the intracellular recycling of efgargimod. In both the single and mulple ascending dose porons,
no signicant reducons in IgM, IgA or serum albumin were observed.
SC - Partnership with Halozyme
In 2020, we and Halozyme expanded the exisng global collaboraon and license agreement that was signed in February
2019. Under the expansion, we gained the ability to access Halozyme’s ENHANZE® drug delivery technology for three
addional exclusive targets upon nominaon bringing the total to six potenal targets under the collaboraon. To date,
two targets have been nominated including the human neonatal Fc receptor FcRn and complement component C2.
In July 2019, we evaluated a SC formulaon of efgargimod that incorporates Halozyme’s ENHANZE® drug delivery
technology in a Phase 1 clinical trial in healthy volunteers, which demonstrated retained pharmacodynamic prole of
IV-formulated efgargimod.
ENHANZE® has demonstrated across mulple FDA-approved products the ability to remove tradional limitaons on
the volume of biologics that can be delivered subcutaneously, potenally shortening drug administraon me, reducing
healthcare praconer me, and oering addional exibility and convenience for paents.
SC – Partnership with Elektro
In April 2021, we entered into a collaboraon and license agreement with Elektro to explore new SC formulaons uliz
-
ing Elektro’s small volume injecon technology for efgargimod, and up to one addional target. See secon 1.5.1 “Our
Exclusive License with Elektro for efgargimod” for more informaon.
1.3.3 Efgartigimod (formerly ARGX-113) Indications
Generalized Myasthenia Gravis (gMG)
Overview
gMG is a rare and chronic autoimmune disease where IgG autoanbodies disrupt communicaon between nerves and
muscles, causing debilitang and potenally life-threatening muscle weakness.
In myasthenia gravis (
MG
), IgG autoanbodies either bind and occupy or cross-link and internalize the receptor on the muscle cells, thereby prevenng the binding of acetylcholine, the signal sent by the nerve cell. In addion, these autoan
-
bodies can cause destrucon of the neuromuscular juncon by recruing complement, a potent cell-destroying mecha
-
nism of the human immune system. The muscle weakness associated with MG usually presents inially in ocular muscles
and can then spread into a generalized form aecng mulple muscles, known as gMG. Approximately 85% of people
with MG progress to gMG within 24 months (source: Behin et al. New Pathways and Therapeucs Targets in Autoimmune
Myasthenia Gravis. J Neuromusc Dis 5. 2018. 265-277). MG in the ocular form inially causes droopy eyelids and blurred
or double vision due to paral paralysis of eye movements. As MG becomes generalized it aects muscles in the neck and
jaw, causing problems in speaking, chewing and swallowing. MG can also cause weakness in skeletal muscles leading to
problems in limb funcon. In the most severe cases, respiratory funcon can be weakened to the point where it becomes
life-threatening. These respiratory crises occur at least once in the lives of approximately 15% to 20% of MG paents. The
U.S. prevalence of MG is esmated at approximately 20 cases per 100,000 (source: Philips et al, Ann NY Acad Sci. 2003;
Paents with conrmed AChR anbodies account for approximately 85% of the total gMG populaon (Behin et al. New
Pathways and Therapeucs Targets in Autoimmune Myasthenia Gravis. J Neuromusc Dis 5. 2018. 265-277).
ADAPT-SC Trial Design
In January 2021, we iniated ADAPT-SC, a registraonal non-inferiority bridging study of SC efgargimod for the treat
-
ment of gMG. The design of the bridging study is based on the demonstrated associaon between total IgG reducon
and clinical benet in gMG, and incorporates feedback from the FDA. The study is comparing the PD eect of 1000 mg SC
efgargimod with 10 mg/kg IV efgargimod. The primary endpoint is the percent change from baseline of total IgG levels
measured at day 29.
We expect to announce topline results for the ADAPT-SC trial in the rst quarter of 2022.
Other trials
In addion, we are currently evaluang efgargimod in IV formulaon, in clinical trials exploring variaons on dosing in
the gMG, in children with gMG, as well as in a healthy volunteer trial evaluang the immune response aer vaccinaon
(PNEUMOVAX 23) while receiving efgargimod.
Primary Immune Thrombocytopenia (ITP)
Overview
Primary ITP is an acquired autoimmune bleeding disorder, characterized by a low platelet count (<100×109/L) in the ab
-
sence of other causes associated with thrombocytopenia. In most paents, IgG autoanbodies directed against platelet
receptors can be detected. They accelerate platelet clearance and destrucon, inhibit platelet producon, and impair
platelet funcon, resulng in increased risk of bleeding and impaired quality of life. Primary ITP is dierenated from sec
-
ondary immune thrombocytopenia, which is associated with other illnesses, such as infecons or autoimmune diseases,
or which occurs aer transfusion or taking other drugs, such as cancer drugs. Platelet deciency, or thrombocytopenia, can
cause bleeding in ssues, bruising and slow blood clong aer injury. Paents may suer from depression and fague as
well as side eects of exisng therapies, impairing their quality of life. Current therapeuc approaches include non-specic
immunosuppression (e.g., steroids and rituximab), inhibion of platelet clearance (e.g., splenectomy, IVIg, an-D globulin,
42 | Our Products and Product Candidates Our Products and Product Candidates | 43
PART I
Days post infusion
IgG1
placebo (n=2)
active (n=6)
% T
150
100
50
0
0 20 40 60
Days post infusion
IgG2
placebo (n=2)
active (n=6)
% T
150
100
50
0
0 20 40 60
Days post infusion
IgG3
placebo (n=2)
active (n=6)
% T
150
100
50
0
0 20 40 60
Days post infusion
IgG4
placebo (n=2)
active (n=6)
% T
150
100
50
0
0 20 40 60
Days post infusion
Total IgG
placebo (n=2)
active (n=6)
% T
150
100
50
0
0 20 40 60
Figure 4: Reducon in the levels of four IgG anbody classes and total IgG levels in the mulple ascending dose part of our Phase 1 clinical trial of
efgargimod in healthy volunteers at a dose of 10 mg/kg every seven days.
and Syk inhibitor fostamanib13) or smulaon of platelet producon (e.g., thrombopoien receptor agonist TPO-RA).
Splenectomy remains the only treatment that provides sustained remission o therapy for one year or longer for a high pro
-
poron of paents. ITP aects approximately 72,000 paents in the United States (sources: Current Medical Research and
Opinion, 25:12, 2961-2969; Am J Hematol. 2012 Sep; 87(9): 848–852; Pediatr Blood Cancer. 2012 Feb; 58(2): 216–220).
Phase 3 ADVANCE Trials
In the fourth quarter of 2019, the rst of two registraonal trials, the ADVANCE Phase 3 trial, was iniated to evaluate
10 mg/kg IV efgargimod for the treatment of primary ITP. The second registraonal ADVANCE-SC trial of 1000mg SC
efgargimod for the treatment of primary ITP was iniated in the fourth quarter of 2020. We expect to enroll approxi
-
mately 156 paents in each trial. Topline data are expected for the ADVANCE trial in the second quarter of 2022 and for
the ADVANCE-SC trial in the rst quarter of 2023, respecvely. The primary endpoint of both trials is the proporon of
chronic ITP paents with a sustained platelet count response, dened as achieving platelet counts of at least 50×109/L
for at least four of the six visits between weeks 19 and 24 of the trial.
Phase 2 Trial
We completed a randomized, double-blind, placebo-controlled Phase 2 clinical trial to evaluate the safety, ecacy and
pharmacokinecs of efgargimod in 38 adult primary ITP paents, who had platelet counts lower than 30 x 109/L while
being on a stable dose of standard-of-care treatments consisng of corcosteroids, permied immunosuppressants or
thrombopoien receptor agonists, or aer having undergone a splenectomy or while being monitored under a ‘watch
& wait’ approach. We conducted the clinical trial at 19 clinical centers across eight countries in the European Union. Pa
-
ents were randomly assigned to three arms of twelve or 13 paents for the placebo or efgargimod arms, respecvely.
All paents in this clinical trial on a drug standard-of-care treatment were to connue to receive their stable dose of stan
-
dard-of-care treatment as per the protocol. One treatment arm received 5 mg/kg efgargimod, the second arm received
10 mg/kg efgargimod and the third arm received placebo. Dosing took place in a three-week period, which included
four weekly doses of efgargimod or placebo. Paent follow-up connued for 21 weeks aer treatment. Paents from
all three cohorts were eligible to enroll in a one-year open-label extension study at the 10mg/kg dose of efgargimod,
subject to meeng enrollment criteria, including platelet counts lower than 30 x 109/L.
Full results from the Phase 2 trial were published in the peer-reviewed American Journal of Hematology. Efgargimod
was well-tolerated and showed a correlaon of reduced IgG levels, increased platelet counts and reduced bleeding in
ITP paents.
The primary endpoint analysis demonstrated efgargimod to be well-tolerated in all paents, with most treatment
emergent adverse events (
TEAE
) observed characterized as mild (CTCAE Grading 1 and 2). There were no dose-related safety observaons and the safety prole was consistent with previous observaons in healthy volunteers and myas
-
thenia gravis paents. No increased risk of infecon was apparent in the efgargimod-treated groups compared to the
placebo group.
Targeng FcRn with efgargimod resulted in rapid and selecve IgG reducon, and a greater numerical reducon was
observed in the efgargimod 10 mg/kg group, without impacng the levels of other immunoglobulin isotypes. Efgargi
-
mod administraon did not result in a reducon of albumin levels, suggesng that the Fc fragment efgargimod is not
interfering with albumin binding or inuencing the fate of FcRn.
Reducon in platelet-associated autoanbodies were observed in the majority of paents with clinically meaningful
platelet increase.
Efgargimod-treated groups achieved a higher maximum mean platelet count change from baseline compared to the pla
-
cebo group. Post hoc analyses requiring greater frequency or duraon of platelet count ≥50×109/L, or increased platelet
count to ≥100×109/L, demonstrated the ecacy of efgargimod. Six paents (46%) treated in both efgargimod groups
showed an increase in platelet count >50×109/L on at least two occasions. Addionally, substanally more acve-treated
paents achieved a platelet count ≥50×109/L for more than 10 cumulave days compared to the placebo group (10 [38%]
vs. 0 [0%], respecvely).
Adverse event reporng showed no severe bleeding events in any paent, mild bleeding events only were reported in
the 10 mg/kg arm and mild and moderate in the 5 mg/kg and placebo arm. Incidence of bleeding events was reduced by
efgargimod treatment as assessed by the World Health Organizaon bleeding scale, with separaon from placebo as
early as the third dose in the 10 mg/kg arm. Incidence of bleeding events in the skin was reduced by efgargimod treat
-
ment as assessed by the ITP-BAT bleeding scale, with no clear signal of bleeding events in the mucosa or organs in either
treatment arm.
Low ter of an-drug anbodies was detected in 16.7% of placebo paents and 30.8% of treated paents in the 10 mg/kg
arm with no apparent eect on pharmacokinecs or pharmacodynamics.
Phase 3 - IV and SC Trials
In the fourth quarter of 2019, the rst potenal registraonal Phase 3 trial of IV efgargimod in ITP, the ADVANCE trial,
was iniated to evaluate a dose of 10 mg/kg IV efgargimod. We expect to enroll 156 paents in this Phase 3 trial. The
second potenal registraonal Phase 3 trial of SC efgargimod in ITP, the ADVANCE SC trial was iniated in the fourth
quarter of 2020 to evaluate a dose of 1000 mg SC efgargimod. We expect to enroll 156 paents in this trial as well.
We expect to announce topline results for the ADVANCE and ADVANCE-SC trials in the second quarter of 2022 and rst
quarter of 2023, respecvely.
Pemphigus Vulgaris (PV)
Overview
PV is an autoimmune disorder associated with mucosal and skin blisters that lead to pain, diculty swallowing and skin
infecon. This chronic, potenally life-threatening disease is triggered by IgG autoanbodies targeng desmoglein-1 and
-3, which are present on the surface of keranocytes and important for cell-to-cell adhesion in the epithelium. Auto
-
anbodies targeng desmogleins result in loss of cell adhesion, the primary cause of blister formaon in Pemphigus.
Similar to MG and ITP, disease severity of Pemphigus correlates to the amount of pathogenic IgGs targeng desmogleins.
Currently, there are an esmated 17,400 pemphigus paents in the United States, of which an esmated 13,100 paents
are suering from PV. Several disease acvity measurements exist for the clinical evaluaon of PV paents, including the
pemphigus disease area index (
PDAI
), autoimmune bullous skin disorder intensity score (ABSIS
), and the PV acvity score (
PVAS
). The PDAI is reported to have the highest validity and is recommended for use in clinical trials of PV.
Phase 3 ADDRESS Trial
In the fourth quarter of 2020, the registraonal ADDRESS trial was iniated of SC efgargimod for the treatment of PV
and PF. This is a randomized, double-blinded, placebo-controlled study, where the objecve is to assess ecacy, safety
and tolerability in up to 150 newly diagnosed or relapsing paents with moderate to severe pemphigus. Paents are ran
-
domized to receive either SC efgargimod or placebo for 30 weeks. Paents start on concomitant steroids based on what
we determine to be the opmized dosing regimen from the Phase 2 study. The primary endpoint will assess the propor
-
on of paents who achieve complete remission on a minimal steroid dose at 30 weeks. The ADDRESS trial will evaluate
ecacy and safety, including the potenal to drive fast onset of disease control and complete remission and the ability
to taper corcosteroids. A relevant minority poron of the paents in the ADDRESS trial are parcipang in studies con
-
ducted in Ukraine or Russia. Due to the conict between Russian and Ukraine, we may be unable to fully benet from the
study data collected to date and we may need to recruit addional paents which could delay data read-out points for
our studies, although we are currently unable to assess if and by how much such delays would occur. Accordingly, ming
of topline data for the ADDRESS trial of SC efgargimod for PF and PV may be impacted but we are currently unable to
assess the full impact due to the rapidly developing situaon.
Phase 2 Trial
We completed an open-label Phase 2 adapve trial in which, through sequenal cohorts, 34 paents were dosed at 10 or
25mg/kg IV efgargimod with various dosing frequencies, as monotherapy or add-on therapy to low dose oral predni
-
sone. The primary endpoint of the trial was safety and tolerability. The full Phase 2 trial results were published in The
Brish Journal of Dermatology.
In this trial, we observed:
• a favorable tolerability prole, consistent with data from previous efgargimod studies and those adverse events were
mostly mild.
44 | Our Products and Product Candidates Our Products and Product Candidates | 45
PART I
• a major decrease in serum total IgG and an-desmoglein (DSG) autoanbodies and correlated with improved PDAI scores.
• that 90% (28/31) of paents demonstrated early disease control; median me to disease control for monotherapy and
combinaon therapy was 17 days.
• complete clinical remission in 64% (14/22) of paents receiving opmized prolonged treatment with efgargimod in
combinaon with a median dose of 0.26mg/kg/day prednisone within 2-41 weeks.
• a favorable tolerability prole, consistent with data from previous efgargimod studies.
Chronic Inammatory Demyelinang Polyneuropathy (CIDP)
Overview of Chronic Inammatory Demyelinang Polyneuropathy
CIDP is a chronic autoimmune disorder of peripheral nerves and nerve roots caused by an autoimmune-mediated de
-
strucon of the myelin sheath, or myelin producing cells, insulang the axon of the nerves and enabling speed of signal
transducon. The cause of CIDP is unknown, but abnormalies in both cellular and humoral immunity have been shown.
CIDP is a chronic and progressive disease: onset and progression occur over at least eight weeks in contrast with the
more acute Guillain-Barré-syndrome. Demyelinaon and axonal damage in CIDP lead to loss of sensory and/or motor
neuron funcon, which can lead to weakness, sensory loss, imbalance and/or pain. CIDP aects approximately 16,000
paents in the United States.
Most CIDP paents require treatment and IVIg which is the preferred rst-line therapy. Glucocorcoids and plasma ex
-
change are used to a lesser extent as they are either limited by side eects upon chronic use, in the case of glucocorcoids,
or invasiveness of the procedure and access, which is restricted to specialized centers in case of plasma exchange. Alter
-
nave immunosuppressant agents are typically reserved for paents ineligible for or refractory to IVIg, glucocorcoids or
plasma exchange. While IVIg therapy can usually control CIDP, most paents require repeated treatments every two to six
weeks for many years. This is due to the fact that IVIg monotherapy does not usually lead to long-term remission.
ADHERE Trial
At the end of 2019, we iniated the registraonal ADHERE trial evaluang SC efgargimod for the treatment of CIDP. The
ADHERE trial is a randomized, withdrawal study evaluang 1000mg weekly SC efgargimod expected to enroll approx
-
imately 130 paents. The trial consists of an open-label Stage A followed by a randomized, placebo-controlled Stage
B with a planned interim responder analysis aer the rst 30 paents enroll in Stage A. In order to enter Stage A and
receive efgargimod, both paents who are treatment-naïve or on therapy must rst receive a conrmed diagnosis of
CIDP by an independent panel of experts and demonstrate acve disease. To show acve disease, paents who are on
current CIDP therapy have to demonstrate a minimal clinically meaningful worsening aer treatment withdrawal based
on at least one CIDP clinical assessment tool, including Inammatory Neuropathy Cause and Treatment (
INCAT
) Disability
Score, Inammatory Rasch-built Overall Disability Scale (
I-RODS
) or mean grip strength. To advance to Stage B, paents need to demonstrate a minimal clinically meaningful response to efgargimod equivalent with the loss observed on the
same ecacy scale on which worsening is observed during the withdrawal period. In Stage B, paents are randomized to
either SC efgargimod or placebo for up to 48 weeks. The primary endpoint is event-driven and based on the adjusted
INCAT ecacy score in Stage B.
Interim Analysis from ADHERE Trial
In February 2021, we announced a “go” decision to transion into the second, placebo controlled stage of this trial based
on a planned ecacy and safety assessment following the enrollment of 30 paents into the inial part of the ADHERE
trial. The ADHERE trial is expected to enroll approximately 130 paents in total to support potenal registraon of SC
efgargimod for the treatment of CIDP. The interim analysis achieved the pre-dened threshold for connuaon, which
was based on response rates seen in precedent clinical trials of current standard of care in CIDP. The decision to connue
enrollment was conrmed by an independent data monitoring commiee. In addion, the safety and tolerability data
observed to date is consistent with that of efgargimod in other clinical trials.
We expect to announce the topline data of the ADHERE trial in the rst quarter of 2023.
Idiopathic Inammatory Myopathy (Myosis)
Overview of Myosis
Myosis are a rare group of autoimmune diseases that can be muscle specic or aect mulple organs including the skin,
joints, lung, gastrointesnal tract and heart. Myosis can be very severe and disabling and have a material impact on
quality of life. Inially these myopathies were classied as either dermatomyosis (
DM
) or polymyosis, but as the underly-
ing pathophysiology of myosis has become beer understood, including through the idencaon of characterisc auto
-
anbodies, new polymyosis subgroups have emerged. Two of these subtypes are immune-mediated necrozing myopathy
(
IMNM
) and an-synthetase syndrome (
ASyS
). Proximal muscle weakness is a unifying feature of each myosis subset. • IMNM is characterized by skeletal muscle weakness due to muscle cell necrosis. The muscle weakness is typically sym
-
metrical – on both sides of the body – and aects proximal muscles including hips, thighs, upper arms, shoulder and
neck. The muscle weakness can be severe and lead to diculty in compleng daily tasks. Characterisc autoanbodies
of IMNM, include an-signal recognion parcle (an-SRP) and an-3-hydroxy-3-methylglutaryl-coenzyme A reductase
(an-HMGCR) autoanbodies.
• ASyS is characterized by muscle inammaon, inammatory arthris, intersal lung disease, thickening and cracking
of the hands (mechanic’s hands) and Raynaud phenomenon. Autoanbodies associated with ASyS aack tRNA synthe
-
tase enzymes and include an-Jo-1 and an-PL1 and PL-12 most commonly.
• DM is characterized by muscle inammaon and degeneraon and skin abnormalies, including heliotrope rash, Got
-
tron papules, erythematous, calcinosis and edema. DM is associated with myosis-specic autoanbodies, including
an-Mi-2, an-MDA-5, an-TIF-1γ and others.
There are no current FDA-approved therapies for IMNM or ASyS. IVIg (Octagam 10%) was approved by the FDA for the
treatment of dermatomyosis in July 2021. Myosis paents are most oen treated with high-dose steroids.
ALKIVIA Trial
We intend to iniate the registraonal ALKIVIA trial of SC efgargimod for the treatment of myosis in the second quar
-
ter of 2022. We will enroll 180 paents dosed with 1000mg SC efgargimod in three myosis subtype cohorts, IMNM,
ASys and DM. An interim analysis is planned aer the rst 30 paents of each myosis subtype.
The primary endpoint will be based on the mean total improvement score and addional key secondary endpoints will
include me to response, durability of benets, the quality of life and the individual components of the total improve
-
ment score.
Bullous Pemphigoid (BP)
Overview
BP is the most common autoimmune blistering disease and is driven by autoanbodies aecng the skin. The disease
typically aects elderly people and early key symptoms are itch and rash and paents develop uid-lled blisters during
disease progression. The prevalence of bullous pemphigoid is twelve per 100,000 adults and the incidence increases
with age. BP is associated with a high disease burden and can have a signicant impact on the quality of life of paents.
The mortality of BP in the U.S. is 2.4% or higher than the mortality in the general populaon of the same age. There are
currently no approved therapies available for BP. First line treatment consists of topical or systemic corcosteroids, which
result in substanal morbidity and increased mortality, convenonal immunosuppressants as corcosteroid-sparing
agents, rituximab and IVIg.
BP is a well characterized autoimmune disease in which the binding of autoanbodies to hemidesmosomal proteins,
BP180 and BP230, iniates a cascade of inammatory events resulng in blister formaon. BP180 and BP230 are involved
in the stable aachment of keranocyte to the underlying matrix. The autoanbody acons include mechanical disrupon
of keranocyte adhesion and cytokine release. Immune complex formaon iniates complement acvaon leading to the
recruitment mast cells, neutrophils, eosinophils and other immune cells and to the release of proteases and inammatory
mediators. All these eects, which start with the binding of the autoanbodies, induce the blistering observed in BP.
BALLAD Trial
We iniated the BALLAD registraonal trial evaluang SC efgargimod in BO, in the second half of 2021, in which we will
enroll 160 paents.
The study populaon will be newly diagnosed and relapsing paents within one year diagnosis. Paents will be random
-
ized 1-to-1 to receive efgargimod or placebo for total duraon of 36 weeks. Standard of care concomitant medicaon
will consist of prednisone at a starng dose of 0.5 milligram per kilogram per day, and the dose will be adjusted if the
46 | Our Products and Product Candidates Our Products and Product Candidates | 47
PART I
Linda
“ It is very important to me and others like
me, that new innovations are developed
in clinics so that we can continue to
have hope for better treatments and
an improved quality of life.’’
ITP
Patient
ITP Patient | 4948 | ITP Patient
paent achieves sustained control of disease acvity. The primary endpoint is the proporon of parcipants in complete
remission while on minimal steroids (≤0.1mg/kg/day) for at least eight weeks at week 26. Secondary endpoints relate
to cumulave steroid doses, IGA BP score, complete remission o steroids, average itch, control of disease acvity, and
quality of life measures. An interim analysis of the BALLAD trial is expected aer the rst 40 paents.
New Efgargimod Indicaons
In January 2022, we announced that we will be iniang proof-of-concept trials in four new autoimmune indicaons
through our partnership agreements with Zai Lab and IQVIA:
• Membranous Nephropathy (MN) is an autoimmune, glomerular disease and the most frequent cause of nephroc
syndrome. MN is characterized by thickening of the glomerular capillary walls caused by immune complex deposion.
70% of MN paents have IgG autoanbodies against PLA2R. In paents without PLA2R autoanbodies, there can be
detectable an-THSd7A or an-NELL1 anbodies. 20-30% of paents progress to end-stage renal disease. There are no
current approved therapies for MN.
• Lupus Nephris (LN) is a glomerulonephris and one of the most severe and common organ manifestaons of the
autoimmune disease systemic lupus erythematosus (SLE). LN is a substanal cause of morbidity and death among
paents with SLE. Autoanbodies associated with LN include an-dsDNA and an-nuclear anbodies. 5-20% of LN
paents progress to end-stage renal disease. Oral corcosteroids and broad immunosuppressants are current standard
of care but are not uniformly eecve.
• Primary Sjögren’s Syndrome (primary SjS) is a systemic autoimmune disease of the exocrine glands that can aect
salivary and lacrimal glands, mostly, and result in severe dryness of mucosal surfaces, primarily in the eyes and mouth.
In addion to sicca symptoms, paents can experience signicant fague, chronic pain, major organ involvement,
neuropathies and lymphomas. Autoanbodies are present in the majority of paents and include annuclear anbod
-
ies and anbodies against SjS-related angen A and B (an-SSA Ro and SSB La). There are no current FDA-approved
therapies and paents are most oen treated with IVIg, in severe cases, or eyes drops and corcosteroids in more mild
to moderate paents.
• COVID-19 mediated postural orthostac tachycardia syndrome (COVID-19 mediated POTS) has been emerging aer
resoluon of COVID-19 infecon in previously healthy paents. POTS is a disorder of the autonomic nervous system
that is characterized by a rise in heart rate when moving to a standing posion and addional symptoms of shortness
of breath, headache, fague, poor concentraon, weakness and anxiety. The large majority of paents are women
between 15 and 50 years of age. There is a strong associaon of POTS to acvang autoanbodies to autonomic G-pro
-
tein coupled receptors (GPCR), including the β1 and β2-adrenergic receptors and M2 and M3 muscarinic receptors.
There are no current FDA-approved therapies and symptomac treatments focus on blood volume, kidney sodium
levels, heart rate reducon and vessel constricon.
Zai Lab Limited
Our Zai Lab strategic collaboraon, which was announced in January 2021, allows us to accelerate development of efgar
-
gimod into new autoimmune indicaons with Zai Lab taking operaonal leadership of the Phase 2 proof-of-concept trials.
Zai Lab will iniate Phase 2 proof-of-concept trials in 2022 in MN and LN, which both fall within our emerging nephrology
franchise.
IQVIA
On December 2, 2021 we entered into a strategic asset development agreement (the
Asset Development Agreement
)
with IQVIA. Pursuant to the Asset Development Agreement, IQVIA shall perform asset and indicaon development
services for efgargimod through an advanced outsourcing model. Such services include, but are not limited to, overall
product indicaon development strategy, design of clinical trial protocol, set-up, execuon and oversight of clinical devel
-
opment plans for an indicaon for efgargimod selected by us.
To enable and encourage fast and innovave delivery of the services by IQVIA, the Asset Development Agreement con
-
tains an innovave earn-back and bonus plan based upon the performance of IQVIA.
Primary SjS and COVID-mediated POTS are the rst indicaons idened by argenx to be further developed under the
Asset Development Agreement.
1.3.4 ARGX-117 Development
ARGX-117 is a highly dierenated therapeuc monoclonal anbody targeng complement component C2 equipped with
our proprietary NHANCE™ mutaons. By addressing a novel target at the intersecon of the complement and lecn path
-
ways of the complement cascade, we believe ARGX-117 represents a broad pipeline opportunity across several severe
autoimmune indicaons. Acvaon of the classical and lecn pathway of complement may contribute to ssue damage
and organ dysfuncon in a number of autoimmune inammatory diseases and ischemia-reperfusion condions. Targeng
C2 also leaves the alternave pathway of the complement system intact, which is an important component of the innate
defense system
ARGX-117 exhibits both pH- and calcium dependent bind
-
ing. These unique characteriscs enable ARGX-117 to cap
-
ture free C2 in circulaon and release it in the endosome
to be sorted for degradaon in the lysosome. ARGX-117
is equipped with NHANCE mutaons increasing its anity
for FcRn and allowing it to recycle back into circulaon to
capture more C2.
We obtained the rights to ARGX-117 as part of our Immu
-
nology Innovaon Program. argenx and Broteio Pharma
launched a collaboraon in 2017 to conduct research, with
support from the University of Utrecht, to demonstrate
preclinical proof-of-concept of the mechanism of ARGX-
117. Based on promising preclinical data generated under
this collaboraon agreement, we exercised the exclusive
opon to license the program and assumed responsibility
for further development and commercializaon.
In addion to an intravenous formulaon, we have ex
-
clusive access to Halozyme’s ENHANZE® SC drug delivery
technology for the C2 target.
Phase 1 Data
We conducted a Phase 1 healthy volunteer trial of IV and
SC ARGX-117. This rst-in-human clinical study was a
double-blind placebo-controlled study designed to assess
the safety, tolerability, PK and PD of a broad dose range of
ARGX-117 in 102 healthy subjects. In the single ascending
dose (
SAD
) part, we evaluated 70 subjects and tested up to 80 mg/kg administered IV and up to 60mg/kg admin
-
istered SC. In the mulple ascending dose (
MAD
) part of the study, we evaluated 32 subjects to understand the
safety and tolerability of repeated administraons and in
parcular to generate a data-set to opmally inform a PK/
PD model.
The majority of the observed TEAEs were categorized as grade 1 (or mild). Few grade 2 (or moderate) TEAE were ob
-
served and, in the MAD part of the study, no grade 2 or higher TEAEs were observed. Overall, we concluded that single
and mulple administraons of ARGX-117 or placebo have a favorable safety and tolerability prole supporng the inves
-
gaon of study drug in paent studies.
We observed a dose-dependent reducon of free C2 levels. Aer one dose of 30mg/kg ARGX-117, free C2 levels were
reduced by 95% for more than 100 days. In the MAD part of the study, we could reach full complement blockade with
more than 99% reducon of free C2 levels.
50 | Our Products and Product Candidates Our Products and Product Candidates | 51
Figure 5
PART I
their V-regions when immunized with human disease targets. We then combine these llama V-regions with Fc regions of
fully human anbodies, resulng in anbodies that we then produce in industry-validated producon cell lines. The re
-
sulng anbodies are diverse and, due to their similarity to human anbodies, we believe they are well suited to human
therapeuc use. With this breadth of anbodies, we are able to test many dierent epitopes. Being able to test many
dierent epitopes with our anbodies enables us to search for an opmized combinaon of safety, potency and species
cross-reacvity with the potenal for maximum therapeuc eect on disease. These anbodies are oen cross-reacve
with the rodent version of chosen disease targets. This rodent cross-reacvity enables more ecient preclinical develop
-
ment of our product candidates because most animal ecacy models are rodent-based. By contrast, most other anbody
discovery plaorms start with anbodies generated in inbred mice or synthec anbody libraries, approaches that we
believe are limited by insucient anbody repertoires and limited diversity, respecvely. Our SIMPLE Anbody™ plaorm
allows us to access and explore a broad target universe, including novel and complex targets, while minimizing the long
melines associated with generang anbody candidates using tradional methods.
Our proprietary Fc Engineering Technologies
Our anbody engineering technologies – NHance®, ABDEG™, POTELLIGENT® and DHS mutaons – focus on engineer
-
ing the Fc region of anbodies in order to augment their interacons with components of the immune system, thereby
potenally expanding the therapeuc index of our product candidates by modifying their half-life, ssue penetraon,
rate of disease target clearance and potency. In addion, we obtained a non-exclusive research license and opon for
the SMART-Ig® and ACT-Ig® technologies. For example, our NHance® and ABDEG™ engineering technologies enable us to
modulate the interacon of the Fc region with FcRn, which is responsible for regulang half-life, ssue distribuon and
pharmacodynamic properes of IgG anbodies. Similarly, our POTELLIGENT® engineering technology modulates the in
-
teracon of the anbody Fc region with receptors located on specialized immune cells known as natural killer (
NK
) cells. These NK cells can destroy the target cell, resulng in enhanced anbody-dependent cell-mediated cytotoxicity (
ADCC
).
NHance® and ABDEG™: Modulaon of Fc Interacon with FcRn.
An illustraon of the FcRn-mediated anbody recycling
mechanism is shown in gure 6. Serum proteins, including
IgG anbodies, are rounely removed from the circulaon by
cell uptake. Anbodies can bind to FcRn, which serves as
a dedicated recycling receptor in the endosomes, which have
an acidic environment, and then
return to the circulaon
by binding with their Fc region to FcRn. Unbound anbod
-
ies end up in the lysosomes and are degraded by enzymes.
Because this Fc/FcRn interacon is highly pH-dependent,
anbodies ghtly bind to FcRn at acidic pH (pH 6.0) in the
endosomes but release again at neutral pH (pH 7. 4) in the
circulaon.
NHANCE®
NHance® refers to two mutaons that we introduce into the
Fc region of an IgG anbody. NHance® is designed to extend
anbody serum half-life and increase ssue penetraon.
In certain cases, it is advantageous to engineer anbod
-
ies that remain in the circulaon longer, allowing them to
potenally exert a greater therapeuc eect or be dosed
less frequently. As shown in gure 7, NHance® anbodies
bind to FcRn with higher anity, specically under acidic
pH condions. Due to these ghter bonds, NHance®
FcRn-mediated anbody recycling is strongly favored over
lysosomal degradaon, although some degradaon does
occur. NHance®
allows a greater proporon of anbodies
to return to the circulaon potenally resulng in increased
bioavailability and reduced dosing frequency. ARGX-111, ARGX-
109, ARGX-117 and a number of our discovery-stage programs
ulize NHance®.
Following analysis of Phase 1 data, and the observed favorable safety and tolerability prole and consistent PK/PD pro
-
le, we launched a Phase 2 proof-of-concept trial in mulfocal motor neuropathy in the fourth quarter of 2021 within our
neuromuscular franchise.
Overview of Mulfocal Motor Neuropathy and Current Treatment
Mulfocal Motor Neuropathy (
MMN
) is a debilitang neuromuscular autoimmune disorder that is characterized by slowly progressive muscle weakness due to motor neuron degeneraon. It mainly aects hands and forearms, mainly in
males, and the median age of diagnosis is around 40 years. Diagnosis takes about 1.5 years and is usually misdiagnosed
as amyotrophic lateral sclerosis (
ALS
). There are esmated to be around 13,000 paents with MMN in the U.S. and this number is increasing.
Specic pathophysiologic characteriscs of MMN include the presence of immunoglobulin M (
IgM
) autoanbodies against the ganglioside GM1 and conducon block, i.e., impaired propagaon of acon potenals along the axon. GM1 is
widely expressed in the nervous system by neurons, parcularly around the nodes of Ranvier, and Schwann cells.
IVIg is the only approved treatment for MMN and needs to be dosed regularly to address the disease’s progressive nature.
Delayed gra funcon and/or allogra failure
A second proof-of-concept trial will be iniated in the second half of 2022 evaluang ARGX-117 for the prevenon of de
-
layed gra funcon (n) and/or allogra failure aer kidney transplantaon. This occurs in up to 40% of kidney transplant
recipients, and is oen a result of ischemia reperfusion injury.
There is compelling evidence from kidney biopsies of mannose-binding lecn and C4d co-staining indicang involvement
of both the classical and lecn pathways, making C2 an ideal target. Furthermore, there is a well-established process to
measure kidney funcon and establish proof-of-concept and achieve registraon. On this basis, combined with the signif
-
icant unmet medical need, we have chosen delayed gra funcon (
n
) and allogra failure aer kidney transplantaon as second indicaon for ARGX-117.
1.3.5 Immunology Innovation Program
Overview
Our IIP is a core business strategy of co-creaon and innovaon. The IIP also serves as our discovery engine to idenfy
novel targets and together, in collaboraon with our scienc and academic partners, to build potenal new pipeline
candidates. The IIP has been foundaonal in building our pipeline, and every current pipeline candidate from both our
wholly-owned and partnered pipeline emerged from an IIP collaboraon. As part of our long-term strategy, we have
commied to connued investment in the IIP. As at the date of this Universal Registraon Document, we have executed
on our commitment and aim to connue to bring forth at least one new asset per year from the IIP.
Our Suite of Technologies
Through our IIP, we collaborate with scienc and academic partners to idenfy immunology breakthroughs and build
potenal pipeline candidates. This is done through co-creaon where we bring to the collaboraon our unique suite of
anbody engineering technologies and experience in clinical development and our partners bring a wealth of disease and
target biology experse.
Together with our anbody discovery and development experse, this suite of technologies has enabled us to build our
broad pipeline of products and product candidates, across all stages of development and we believe will ensure connu
-
ous development of innovave and relevant programs. Our key technologies are outlined below:
Anbody Engineering and Other Technology Capabilies
Our Proprietary SIMPLE Anbody™ Plaorm
Our proprietary SIMPLE Anbody™ plaorm sources V-regions from convenonal anbodies exisng in the immune
system of outbred llamas. Outbred llamas are those that have been bred from genecally diverse parents, and each has
a dierent genec background. The llama produces highly diverse panels of anbodies with a high human homology in
52 | Our Products and Product Candidates Our Products and Product Candidates | 53
PART I
1
1
3A
2
2
3
3B
Blood Circulation (pH 7.4)
Cell
Antibody
Lysosome
Endosome
(pH 6.0)
FcRn Degraded serum proteins
Figure 6: The FcRn-mediated recycling mechanism
Cell
Antibody with NHance
Lysosome
Endosome
FcRn Degraded serum proteins
Cell
SIMPLE Antibody with ABDEG
Lysosome
Endosome
FcRn Target
ABDEG™
ABDEG™ refers to ve mutaons that we introduce in the
Fc region that increase its anity for FcRn at both neutral
and acidic pH. In contrast to NHance®, ABDEG™ -modi
-
ed Fc regions remain bound to FcRn if the pH changes,
occupying FcRn with such high anity that they deprive
endogenous IgG anbodies of their recycling mechanism,
leading to enhanced clearance of such anbodies by the
lysosomes. Some diseases mediated by IgG anbodies
are directed against self-angens. These self-directed
anbodies are referred to as autoanbodies. We use our
ABDEG™ technology to reduce the level of these patho
-
genic autoanbodies in the circulaon by increasing the
rate at which they are cleared by the lysosomes. ABDEG™
is a component in a number of our products and product
candidates, including efgargimod.
As shown in gure 8, our ABDEG™ technology can also
be used with our pH-dependent SIMPLE Anbodies in
a mechanism referred to as sweeping. Certain SIM
-
PLE Anbodies bind to their target in a pH-dependent
manner. These anbodies bind ghtly to a target at
neutral pH while in circulaon, and release the target
at acidic pH in the endosome. The unbound target is
degraded in the lysosome. However, when equipped
with our ABDEG™ technology, the therapeuc anbodies
remain ghtly bound to FcRn at all pH levels and are not
degraded themselves. Instead, they are returned to the
circulaon where they can bind new targets. We believe
this is especially useful in situaons where high levels of
the target are circulang or where the target needs to be
cleared very quickly from the system.
POTELLIGENT®
POTELLIGENT® modulates the interacon of the Fc region
with the Fc gamma receptor IIIa located on specialized
immune cells, known as NK cells. These NK cells can
destroy the target cell, resulng in enhanced ADCC.
POTELLIGENT® changes the Fc structure by excluding a
parcular sugar unit such that it enables a ghter t with
the Fc gamma receptor IIIa. The strength of this interac
-
on is a key factor in determining the killing potenal of
NK cells. An independent publicaon reported that the
exclusion of this sugar unit of the Fc region increases
the ADCC-mediated cell-killing potenal of anbod
-
ies by 10- to 1000-fold. Cusatuzumab and ARGX-111
ulize POTELLIGENT® (source: Expert Opin Biol Ther
2006; 6:1161-1173; hp://www.tandfonline.com/doi/
full/10.1517/14712598.6.11.1161%20).
Chugai and Clayton
In 2020, we entered into a research license and opon
agreement with Chugai under which we may access
Chugai’s SMART-Ig® (“Recycling Anbody” and part of “Sweeping Anbody” technology) and ACT-Ig® (Anbody half-life
extending technology). In 2020, we also entered into a non-exclusive research agreement with the Clayton Foundaon
under which we may access the Clayton Foundaon’s proprietary DHS mutaons to extend the serum half-life of therapeu
-
c anbodies.
Subcutaneous drug delivery technologies
We have exclusive access to Halozyme’s ENHANZE® SC drug delivery technology for the FcRn and C2 targets and four
addional targets. The global collaboraon and license agreement with Halozyme was announced in February 2019 and
extended in October 2020. The ENHANZE® technology has the potenal to shorten drug administraon me, reduce
healthcare praconer me, and oer addional exibility and convenience for paents.
In addion, in April 2021, we entered into a collaboraon and license agreement with Elektro to explore new SC formu
-
laons ulizing Elektro’s small volume injecon technology for efgargimod, and up to one addional target.
For more informaon on our collaboraons, see secon 1.4 “Collaboraon Agreements”
Other wholly-owned IIP Programs
Cusatuzumab (formerly ARGX-110)
In June 2021, we announced that we regained worldwide rights to our an-CD70 anbody cusatuzumab from Cilag.
Following terminaon of our collaboraon, we have elected that Cilag connues to operaonally support the treatment
and follow-up of paents enrolled in ongoing cusatuzumab clinical trials. Cusatuzumab is being developed for the rare
and aggressive hematological cancer AML, as well as high risk MDS. The CULMINATE trial and ELEVATE trial, described
below, remain ongoing.
In January 2021, we announced interim data from the Phase 2 CULMINATE trial, evaluang cusatuzumab in combinaon
with azacidine in newly diagnosed, elderly AML paents who are ineligible for intensive chemotherapy. The 20 mg/kg
dose has been selected for ongoing and future trials. Cusatuzumab was observed to be well tolerated and the safety data
were consistent with prior studies. Final results from the CULMINATE trial will be presented in a peer reviewed forum.
A set of interim data from the ELEVATE trial, which is evaluang cusatuzumab in combinaon with venetoclax and azac
-
idine in newly diagnosed, elderly paents with AML who are ineligible for intensive chemotherapy, has been presented
at American Society of Hematology in December 2021. Final results from the ELEVATE trial will be presented in a peer
reviewed forum.
ARGX-119
In January 2022, we announced that ARGX-119 is an anbody that targets MUSK, a protein located at the neuromuscular
juncon, in an agonisc or acvang manner. We intend to develop ARGX-119 in a range of neuromuscular diseases, po
-
tenally including congenial MG, a rare hereditary subtype of myasthenia gravis, MUSK MG, a rare autoimmune subtype
of myasthenia gravis, spinal muscular atrophy (
SMA
) and ALS, both rare, severe neuromuscular indicaons. ARGX-118
We have exercised our opon to exclusively acquire rights to ARGX-118, a highly dierenated anbody against Galec
-
n-10, the protein of Charcot-Leyden crystals, which are implicated as a major contributor to severe asthma and to the
persistence of mucus plugs. ARGX-118 has the following dierenated features:
• it acts on a novel target intended to address mucus plugging, a large unmet need in airway inammaon;
• it has a unique mechanism of acon with observed crystal-dissolving properes; and
• its broad potenal in severe airway inammaon diseases where mucus plugging plays a key role, including lung aack
or asthma exacerbaon, allergic bronchopulmonary aspergillosis, and chronic rhinosinusis with nasal polyps.
ARGX-118 was developed under a collaboraon with VIB. Lead opmizaon work on ARGX-118 for airway inammaon
will connue in 2022.
54 | Our Products and Product Candidates Our Products and Product Candidates | 55
Figure 8: SIMPLE AnbodyTM and ABDEGTM technologies
work in concert to sweep diseases targets.
PART I
1
3
2
4
Figure 7
ARGX-120
In addion, we are developing ARGX-120, an anbody against an undisclosed target with applicaon in autoimmune diseases.
Other Partnered Programs
See secons 1.4 “Collaboraon Agreements” and 1.5 “License Agreements” for a descripon of collaboraon and license
agreements that we have entered into to further leverage our IIP.
1.4 Collaboration Agreements
We follow a disciplined strategy to maximize the value of our pipeline by planning to retain all development and commer
-
cializaon rights to those products and product candidates that we believe we can ulmately commercialize successfully,
if approved.
We have partnered, and plan to connue to partner, products and product candidates that we believe have promising
ulity in disease areas or have paent populaons that may benet from resources of other biopharmaceucal com
-
panies. We expect to connue to collaborate selecvely with pharmaceucal and biotechnology companies to leverage
our plaorm technology and accelerate product candidate development. We have entered into mulple collaboraon
agreements with pharmaceucal partners, which are described below.
1.4.1 Our Strategic Partnership with AbbVie for ARGX-115 (ABBV-151)
In April 2016, we entered into a collaboraon agreement with AbbVie S.Á.R.L. (
AbbVie
) to develop and commercialize ARGX-115 (ABBV-151) as a cancer immunotherapy against the novel target GARP (the
AbbVie Collaboraon Agreement
).
ARGX-115 (ABBV-151) employs our SIMPLE Anbody™ technology and works by smulang a paent’s immune sys
-
tem aer a tumor has suppressed the immune system by co-opng immunosuppressive cells such as Tregs. Under the
terms of the AbbVie Collaboraon Agreement, we are responsible for conducng and funding all ARGX-115 (ABBV-151)
research and development acvies up to compleon of IND-enabling studies.
We have granted AbbVie an exclusive opon, for a specied period following compleon of IND-enabling studies, to ob
-
tain a worldwide, exclusive license to the ARGX-115 (ABBV-151) program to develop and commercialize products. Follow
-
ing the exercise of the opon, AbbVie will be subject to diligence obligaons in respect of connuaon of development
and commercializaon of the licensed product(s), and AbbVie will be solely responsible for all research, development and
regulatory costs relang to the products.
In August 2018, AbbVie exercised its opon to develop and commercialize ARGX-115 (ABBV-151) and has now assumed
development obligaons, including the sole responsibility for all research, development and regulatory costs relang to
ARGX-115 (ABBV-151)-based products. Subject to the connuing progress of ARGX-115 (ABBV-151) by AbbVie, we are
eligible to receive development, regulatory and commercial milestone payments in aggregate amounts of up to $110.0
million, $190.0 million and $325.0 million, respecvely, as well as ered royales on product sales at percentages ranging
from the mid-single digits to the lower teens, subject to customary reducons.
Pursuant to the AbbVie Collaboraon Agreement, we have the right, on a product-by-product basis, to co-promote ARGX-
115 (ABBV-151)-based products in the European Economic Area (
EEA
) and Switzerland and to combine the product with our own future oncology programs (if any). The co-promoon eort would be governed by a co-promoon agreement
negoated in good faith by the pares.
Unless earlier terminated upon mutual agreement, for material breach or as otherwise specied in the AbbVie Collaboraon
Agreement, the term of the opon and license agreement ends, with respect to the ARGX-115 (ABBV-151) program, upon the
earliest of (i) a technical failure of the IND-enabling studies which is outside of our control, (ii) AbbVie’s elecon to not exer
-
cise its opon, or (iii) following AbbVie’s exercise of the opon, fullment of all payment obligaons under the agreement.
AbbVie may terminate the AbbVie Collaboraon Agreement for any reason upon prior wrien noce to us. AbbVie’s roy
-
alty payment obligaons expire, on a product-by-product and country-by-country basis, on the date that is the later of (i)
such me as there are no valid claims covering such product, (ii) expiraon of regulatory or market exclusivity in respect
of such product or (iii) ten years aer the rst commercial sale of such product sold in that country under the AbbVie
Collaboraon Agreement.
1.4.2 Our Strategic Partnership with Zai Lab for efgartigimod
In January 2021, we entered into a collaboraon agreement with Zai Lab, a commercial-stage biopharmaceucal com
-
pany, relang to an exclusive out-license for the development and commercializaon of efgargimod in Greater China,
including mainland China, Hong Kong, Taiwan and Macau (the
Zai Lab Agreement
). Pursuant to the Zai Lab Agreement, Zai Lab obtains the exclusive right to develop and commercialize efgargimod in Greater China. Zai Lab will also con
-
tribute Chinese paents to our global Phase 3 trials of efgargimod. Addionally, the Zai Lab Agreement is expected to
accelerate efgargimod global development by iniang mulple Phase 2 proof-of-concept trials in new autoimmune
indicaons under our supervision. In parcular, Zai Lab will launch proof-of-concept trials in two new kidney condions in
2022: LN and MN.
Pursuant to the Zai Lab Agreement, we have received $150.0 million in collaboraon payments, comprised of a $75.0 million
upfront payment in the form of 568,182 newly issued shares in Zai Lab at a price of $132.00 per share, and a $75.0 million
as a guaranteed non-creditable, non-refundable development cost-sharing payment, and we triggered an addional $25.0
million milestone payment following the approval of efgargimod in the U.S. We are also eligible to receive ered royales
(mid-teen to low-twenes on a percentage basis) based on annual net sales of efgargimod in Greater China.
1.4.3 Our Collaboration with Genor Biopharma for ARGX 109
In October 2012, we entered into an exclusive license agreement with Bird Rock Bio, Inc. (
Bird Rock Bio
, formerly known as RuiYi Inc. and Anaphore, Inc.), to develop and commercialize ARGX-109, which employs our SIMPLE Anbody™ and
NHance® technologies and blocks interleukin 6 (IL 6), a cell signaling protein that is an important driver of inammatory
response implicated in the transion from acute to chronic inammaon. In 2018, we and Bird Rock Bio mutually agreed
to terminate this exclusive license agreement. Following the terminaon of our agreement with Bird Rock Bio, we agreed
a direct licensing agreement with Genor Biopharma Co. Ltd (
Genor Biopharma
) and Genor Biopharma connues to de-
velop ARGX-109 for the Chinese market.
1.4.4 Our Strategic Partnership with LEO Pharma for LP0145
In May 2015, we entered into a collaboraon agreement with LEO Pharma A/S (
LEO Pharma
) to develop and commercial-
ize LP0145 for the treatment of dermatologic indicaons involving inammaon (the
LEO Pharma Collaboraon Agree
-
ment
). LP0145 employs our SIMPLE Anbody™ technology and blocks the interleukin-22 receptor (IL-22R) in order to neu
-
tralize the signaling of cytokines implicated in autoimmune diseases of the skin. Pursuant to the LEO Pharma Collaboraon
Agreement, LEO Pharma funded more than half of all product development costs up to CTA approval of a rst product in
a Phase 1 clinical trial, with our share of such costs capped, which was achieved in April 2018. Since then, LEO Pharma
has been solely responsible for funding the clinical development of the program. In May 2021, CTA approval of a Phase 2a
clinical trial for LP0145 was received.
Up through specied periods, LEO Pharma may, against payment of an opon fee to us, exercise an opon to obtain an
exclusive, worldwide license to further develop and commercialize a product, following which LEO Pharma will assume
full responsibility for the connued development, manufacture and commercializaon of such product and be subject to
diligence obligaons in respect of connuaon of development and commercializaon of such product. We are eligible to
receive addional development, regulatory and commercial milestone payments in aggregate amount of up to €120.0 mil
-
lion, as well as ered royales on product sales at percentages ranging from the low single digits to the low teens, subject
to customary reducons.
56 | Collaboration Agreements Collaboration Agreements | 57
PART I
If the opon is not exercised, if LEO Pharma does not meet agreed development diligence obligaons within a specied
me, or if the LEO Pharma Collaboraon Agreement is terminated other than for reasons of our breach or insolvency, we
have the right to develop and commercialize LP0145 alone, subject to our obligaon to pay LEO Pharma low-single digit
percentage royales on net sales of any product covered by any LEO Pharma patents, know-how or rights in research
results generated under the collaboraon.
Unless earlier terminated, the term of the LEO Pharma Collaboraon Agreement ends upon the later of (i) the expira
-
on of the opon period, (ii) the expiraon of the last license granted under the agreement, and (iii) the fullment of all
payment obligaons under the agreement. LEO Pharma may terminate the LEO Pharma Collaboraon Agreement for any
reason upon prior wrien noce to us. LEO Pharma’s royalty payment obligaons expire, on a product-by-product and
country-by-country basis, upon the later of (i) a me when no valid claims covering such product, and (ii) (a) in major mar
-
ket countries with no composion of maer patent covering such product, the expiraon of the data exclusivity period or
(b) in countries that are not major market countries, a double-digit number of years aer the rst commercial sale of such
product sold in that country.
In 2021, we signed two amendments to the LEO Pharma Collaboraon Agreement, to extend LEO Pharma’s opon period
with six months, to allow LEO Pharma to undertake chemistry, manufacturing and control (CMC) development work in
advance of the exercise by LEO Pharma of its opon, and updang the provisions regarding the management of patents.
1.4.5 Our Research Collaboration with Staten for STT-5058
In January 2015, we entered into a collaboraon agreement with Staten Biotechnology B.V. (
Staten
) to develop and commer-
cialize products in the area of dyslipidemia therapy (the
Staten Collaboraon Agreement
). The pares sought to discover and
characterize anbodies against a human target with therapeuc relevance in the eld of dyslipidemia and / or cardiovascular
disease and commence further research programs for targets with therapeuc relevance in these areas. The rst research
program under the Staten Collaboraon Agreement idened STT-5058 for the treatment of dyslipidemia as the inial
product candidate. STT-5058 employs our SIMPLE Anbody™ technology and blocks APOC3, a metabolic target involved in tri
-
glyceride metabolism. Staten iniated dosing in rst-in-human clinical trial of STT-5058. Staten exercised its exclusive opon
to license STT-5058 in March 2017.
Pursuant to the Staten Collaboraon Agreement, the pares were and are jointly responsible for conducng research under
a mutually agreed research plan, with Staten reimbursing us for all costs of carrying out our research responsibilies under
each research program. Staten is responsible for addional clinical development.
On a research program-by-research program basis, we have granted Staten an opon to obtain an exclusive, worldwide,
permanent license to research, develop and commercialize products idened in that program within a specied period of
me. If Staten exercises this opon for a product (as it has for STT-5058), it will be obligated to pay us a percentage of any
payments payable to or on behalf of Staten’s shareholders in certain events, including the change of control, any licensing,
sale, disposion or similar transacon of such product, or otherwise from the research, development or commercializaon of
that product, in each case, depending on the stage of development and ranging up to the low-twenes, subject to downward
proporonal adjustment in the event a poron of the proceeds from the applicable transacon does not include payment
for such product candidate. Staten is under the diligence obligaon to connue to develop and commercialize at least one
product during the term of the Staten Collaboraon Agreement.
The Staten Collaboraon Agreement ended automacally in 2021. In addion, we terminated the research program in con
-
necon with the Staten Collaboraon Agreement since no targets have been selected within 24 months of the eecve date
of the relevant research program agreement, other than the target selected for the STT-5058 research program.
1.4.6 Our Strategic Collaboration with Shire
In February 2012, we entered into a collaboraon agreement with Shire AG (
Shire
, now known as Shire Internaonal GmbH) to discover, develop and commercialize novel human therapeutic antibodies against up to three targets to
address diverse, rare and unmet diseases (the
Shire Collaboration Agreement
). Pursuant to the Shire Collaboration
Agreement, for any target selected for study under the collaboration, the parties worked together to conduct research
and development through discovery of antibodies with certain specificity for and functional activity against those
targets.
Up through a specied period, we have granted Shire an exclusive opon, against payment of a one-me opon fee, to
obtain all right, tle and interest in any anbodies discovered under a study and to obtain an exclusive, worldwide license
under our intellectual property which is necessary to further develop and commercialize products incorporang such
anbodies. Following such exercise, Shire has the diligence obligaon to connue to develop and commercialize at least
one licensed product.
Shire may exercise exclusive opons to develop and commercialize programs arising under our expanded agreement
against an opon fee. In July 2018, Shire exercised such an exclusive opon to in-license an anbody discovered and
developed using our licensed technologies, triggering a milestone payment by Shire to us.
In addion to opon fees, Shire is obligated to pay us on a per-product basis upon achievement of specied develop
-
ment, regulatory and commercial milestones and a percentage of net sales as a royalty. Accordingly, we are eligible
to receive payments in aggregate amounts of up to $3.8 million, $4.5 million and $22.5 million, upon achievement of
development, regulatory and commercial milestones, respecvely, for a product generated against one of the three inial
targets named in the Shire Collaboraon Agreement. For products generated against addional targets, development
and regulatory milestone payments remain the same, and we are eligible to receive payments in aggregate amounts of
up to $60.0 million for achievement of commercial milestones. The royales payable to us are ered, single digit and are
subject to customary reducons.
If Shire does not exercise its opon with respect to any discovered anbody within a specied period, we are free to
research, develop and commercialize anbodies in relaon to the applicable study target, subject to negoaon of a li
-
cense from Shire for the use of any anbodies that were discovered during the applicable study, or any Shire condenal
informaon, Shire intellectual property or Shire’s interest in any joint intellectual property. If (a) Shire (i) does not exer
-
cise its opon, or (ii) exercises its opon but later abandons development of such anbody or (iii) the Shire Collaboraon
Agreement is terminated other than for our breach or insolvency, and (b) Shire is no longer pursuing a development
program with respect to the applicable study target, we may elect to connue the development of such anbody at our
sole cost and expense, subject to negoaon of a license from Shire under which Shire will receive either specied royal
-
es, if we commercialize the program ourselves, or a percentage of sublicensing revenues, if the program is subsequently
sublicensed to a third party.
Unless earlier terminated, the collaboraon term ends with the expiry of the last royalty term under the Shire Collabora
-
on Agreement. Each royalty term expires, on a product-by-product and country-by-country basis, on the date that is the
later of (i) such me as there are no valid claims covering such product or (ii) ten years aer the rst commercial sale of
such product sold in that country under the Shire Collaboraon Agreement. Shire may terminate the agreement for any
reason upon prior wrien noce to us.
1.4.7 Our Strategic Partnership with Janssen for cusatuzumab
In December 2018, we entered into a collaboraon agreement with Cilag, an aliate of Janssen Pharmaceucals, Inc.
(
Janssen
), a subsidiary of Johnson & Johnson, to jointly develop and commercialize cusatuzumab (the
Janssen Collabora
-
on Agreement
).
We were noed of Janssen’s decision to disconnue the collaboraon agreement during a regularly scheduled steering
commiee meeng on June 4, 2021. Following terminaon of our collaboraon, we have elected that Cilag connue to
operaonally support the treatment and follow-up of paents enrolled in ongoing cusatuzumab clinical trials. See secon
1.3.5 “Immunology Innovaon Program”.
58 | Collaboration Agreements Collaboration Agreements | 59
PART I
1.5 License Agreements
We are party to several license agreements under which we license patents, patent applicaons and other intellectual
property to third pares. We have also entered into several license agreements under which we license patents, patent
applicaons and other intellectual property from third pares. License agreements can relate to research and develop
-
ment and/or commercializaon of the relevant product candidates (and technologies) or products. The licensed intel
-
lectual property covers some of our product candidates and some of the Fc engineering technologies that we use. Some
of these licenses impose various diligence and nancial payment obligaons on us. We expect to connue to enter into
these types of license agreements in the future.
1.5.1 Our Exclusive License with Elektrofi for efgartigimod
In April 2021, we entered into a collaboraon and license agreement with Elektro, to explore new SC formulaons for
therapeuc products directed at the human FcRn, including efgargimod, and up to one addional target (the
Elektro
Agreement
). The Elektro-enabled formulaons are aimed to promote addional oponality for paents through at-
home and self-administraon capabilies.
Under the terms of the Elektro Agreement, we will make an upfront payment and future milestones payments across
both targets pending achievement of pre-dened development, regulatory, and commercial milestones. Elektro will also
receive a mid-single digit royalty on sales of commercialized products.
1.5.2 Our Non-Exclusive Research License with Chugai for SMART-lg® and ACT-lg®
In September 2020, we entered into a non-exclusive research license and opon agreement with Chugai Pharmaceucal
Co., Ltd. (
Chugai
) allowing us access Chugai’s SMART-lg® and ACT-lg® Fc engineering technologies for conducng feasi-
bility studies. These technologies are designed to enable us to expand the therapeuc index of our product candidates,
which is the rao between toxic and therapeuc dose, by potenally modifying their half-life, ssue penetraon, rate of
disease target clearance and potency.
1.5.3 Our Non-exclusive License with the Clayton Foundation for DHS mutations
In October 2020, we entered into a non-exclusive research agreement with the Clayton Foundaon relang to the
non-exclusive in-license for the Clayton Foundaon’s proprietary DHS mutaons to extend the serum half-life of thera
-
peuc candidates.
1.5.4 Our Exclusive License with Halozyme for ENHANZE®
In February 2019, we entered into an in-license agreement with Halozyme Inc. (
Halozyme
) for the use of certain patents, materials and know-how owned by Halozyme and relang to its ENHANZE® technology (
ENHANZE®
), for applicaon in the eld of prevenon and treatment of human diseases (the
ENHANZE® License Agreement
). Pursuant to the EN-
HANZE® License Agreement, we were granted exclusive rights to apply ENHANZE® to biologic products against pre-speci
-
ed targets, in order to research, develop and commercialize SC formulaons of our therapeuc anbody-based product
candidates.
Our rst therapeuc target for which we have received an exclusive license from Halozyme is FcRn, which allows us to
apply ENHANZE® to efgargimod and any other product candidates selecve and specic for FcRn. Moreover, the breadth
of our exclusive license to FcRn precludes either Halozyme itself or any of its current or future partners from ulizing
ENHANZE® in the context of an FcRn-targeted product. Our second therapeuc target for which we received an exclusive
license from Halozyme is human C2 associated with the product candidate ARGX-117, which is being developed to treat
severe autoimmune diseases. Pursuant to the ENHANZE® License Agreement, we also have the right to nominate future
targets for an exclusive ENHANZE® license if the target in queson has not already been licensed by Halozyme or is not
already being pursued by Halozyme. From the eecve date of the ENHANZE® License Agreement, we have a four-year
period in which to conduct research and preclinical studies on other target-specic molecules in combinaon with EN
-
HANZE® and may nominate a maximum of one addional target we have not yet nominated for an exclusive commercial
license during the four-year term.
In return for achieving the rst paent dosed for efgargimod -113 Ph3 for ITP we made a $15 million milestone payment
in February 2021. Upon nominaon of any future target for an exclusive commercializaon license and conrmaon by
Halozyme that such a license is available, we will pay $10 million to Halozyme per target. We will be obligated to pay clin
-
ical development, regulatory and commercial milestones totaling $160 million for the rst product that uses ENHANZE®
and is specic for a given target. Throughout the term of the ENHANZE® License Agreement, we must provide Halozyme
on an annual basis a guidance forecast seng out all projected milestone payments for products for the following four
calendar quarters. We are also obligated to pay Halozyme a percentage of net sales as a royalty of any licensed prod
-
uct that uses ENHANZE®. This royalty varies with net sales volume, ranging from the low to mid-single digits, and it is
reduced by a maximum of 50% if following ten years from the rst commercial sale of the product in a country, the last
valid claim within the licensed ENHANZE® patent(s) expires. We have diligence obligaons with respect to the connu
-
aon of development and commercializaon of product candidates, but we are not obligated to ulize ENHANZE® for
every product candidate directed to a given exclusive target(s).
In October 2020, we have expanded our collaboraon with Halozyme for ENHANZE® drug delivery technology to include
three addional exclusive targets upon nominaon bringing the total to six potenal targets.
Pursuant to the ENHANZE® License Agreement, we have the right to grant sublicenses to our subsidiaries and to third
pares both for research/preclinical work (for example, to subcontractors) and for development and commercializaon.
Halozyme has no rights to any of our current or future product candidates which use ENHANZE®. Halozyme provides ded
-
icated specialist support to us which it has accrued over ten years of licensing ENHANZE® to its collaborators.
We may terminate the ENHANZE® License Agreement at any me, either in its enrety or on a target-by-target basis, by
sending Halozyme prior wrien noce. Absent early terminaon, the ENHANZE® License Agreement will automacally
expire upon the expiry of our royalty payment obligaons under the agreement. In the event the ENHANZE® License
Agreement is terminated for any reason, the license granted to us would terminate but Halozyme would grant our
sublicensees a direct license following such terminaon. In the event the ENHANZE® License Agreement is terminated
other than for our breach, we would retain the right to sell licensed products then on hand for a certain period of me
post-terminaon.
As also set out in chapter 4 “Corporate Governance”, our non-execuve director James M. Daly is also a non-execuve
member of the board of directors of Halozyme. Despite this, our entering into the ENHANZE® License Agreement with
Halozyme was not a related party transacon in accordance with IAS 24 - Related Party Disclosures, since Mr. Daly, in
his role as non-execuve director, does not control or have signicant inuence over argenx or Halozyme. Mr. Daly did
not parcipate in any discussions and decision making relang to the ENHANZE® License Agreement. Consequently, no
further disclosures regarding Halozyme have been added in chapter 6.11.2 – Related Party Transacons.
1.5.5 Our Exclusive License with AgomAb for ARGX-114 (AGMB-101)
In March 2019, we entered into an exclusive out-license with AgomAb Therapeucs NV (
AgomAb
) for the use of certain patents rights relang to our proprietary suite of technologies for the development and commercializaon of a series
of agonisc an-MET SIMPLE Anbodies, including ARGX-114 (AGMB-101), an HFG-mimec SIMPLE Anbody™ directed
against the MET receptor. AgomAb is required to use commercially reasonable eorts to develop and commercialize at
least one licensed product. In connecon with our entry into this agreement, we received a prot-sharing cercate
which entles us to 20% of all distribuons to AgomAb’s shareholders (which shall be reduced to 10% following the ling
of an invesgaonal new drug (
IND
) and is subject to further adjustment upon the occurrence of certain nancings). 60 | License Agreements License Agreements | 61
PART I
Upon the occurrence of a qualied inial public oer of AgomAb, the prot-sharing cercate will automacally be
converted into the equivalent number of ordinary shares in AgomAb. This agreement is subject to mutual terminaon
for material breach or insolvency and automacally expires upon the expiraon of the last to expire of our licensed
patent rights.
1.5.6 Our Exclusive License with Broteio for ARGX-117
In March 2017, we entered into a collaboraon with Broteio in connecon with our immunology innovaon program, to
develop an anbody against a novel target in the complement cascade, ARGX-117 (the
Broteio Agreement
). Under the
terms of the Broteio Agreement, we and Broteio jointly developed the complement-targeted anbody to seek to estab
-
lish preclinical proof-of-concept using our proprietary suite of technologies. Upon successful compleon of these studies,
we exercised an exclusive opon to in-license the program in March 2018 and assumed responsibility for further devel
-
opment and commercializaon. Pursuant to the Broteio Agreement, we are obligated to make milestone payments upon
the occurrence of certain development milestones (up to an aggregate of €4.0 million), commercializaon milestones
(up to an aggregate of €10.0 million) and pay ered royales on net sales in the low single digits. We may terminate the
Broteio Agreement for convenience upon 90 days prior wrien noce. The Broteio Agreement is also subject to mutual
terminaon for material breach or insolvency and automacally expires upon the expiraon of our nancial obligaons
thereunder.
1.5.7 Our Exclusive License with VIB for ARGX-118
In November 2016, we entered into a collaboraon under our immunology innovaon program with VIB to develop
anbodies against Galecn-10, the protein of Charcot-Ley-den Crystals, which play a major role in severe asthma and the
persistence of mucus plugs, including ARGX-118 (the
VIB Agreement
). Pursuant to the VIB Agreement, we and VIB jointly developed anbodies against Galecn-10 using our proprietary suite of technologies. Upon successful compleon of this
inial research, we exercised an exclusive opon to in-license the program and assumed responsibility for further devel
-
opment and commercializaon. Under the VIB Agreement, including as amended in November 2018, we are obligated to
make milestone payments upon the occurrence of certain development milestones (up to an aggregate of €4.0 million),
commercializaon milestones (up to an aggregate of €11.0 million) and pay ered royales on net sales in the low single
digits. We may terminate the VIB Agreement for convenience upon 90 days prior wrien noce. The VIB Agreement is
also subject to mutual terminaon for material breach, insolvency or certain patent challenges and automacally expires
upon the expiraon of VIB’s licensed patent rights.
1.5.8 Our Exclusive License with the University of Texas for NHance® and ABDEG™
In February 2012, we entered into an exclusive in-license with The Board of Regents of The University of Texas System
(
UoT
) for use of certain patents rights relang to the NHance® plaorm for any use worldwide (the
UoT Agreement
).
The UoT Agreement was amended on December 23, 2014 to also include certain addional patent rights relang to the
ABDEG™ plaorm. Upon commercializaon of any of our products that use the in-licensed patent rights, we will be obli
-
gated to pay UoT a percentage of net sales as a royalty unl the expiraon of any patents covering the product. This roy
-
alty varies with net sales volume and is subject to an adjustment for royales we receive from a sublicensee of our rights
under the UoT Agreement, but in any event does not exceed 1%. In addion, we must make annual license maintenance
payments to UoT unl terminaon of the UoT Agreement and we have assumed certain development and commercial
milestone payment and reimbursement obligaons We also have diligence requirements with respect to development
and commercializaon of products which use the in-licensed patent rights.
Pursuant to the UoT Agreement, we may grant sublicenses to third pares. If we receive any non-royalty income in
connecon with such sublicenses, we must pay UoT a percentage of such income varying from low-middle single digits to
middle-upper single digits depending on the nature of the sublicense. Such fees are waived if a sublicensee agrees to pay
the milestone payments as set forth in the UoT Agreement.
We may unilaterally terminate the UoT Agreement for convenience upon prior wrien noce. Absent early terminaon,
the UoT Agreement will automacally expire upon the expiraon of all issued patents and led patent applicaons within
the patent rights covered by the UoT Agreement. Our royalty payment obligaons expire, on a product-by-product and
country-by-country basis, at such me as there are no valid claims covering such product.
1.5.9 Our Non-Exclusive License with BioWa for POTELLIGENT®
In October 2010, we entered into a non-exclusive in-license agreement with BioWa, Inc. (
BioWa
) for use of certain patents and know-how owned by BioWa and relang to its POTELLIGENT® plaorm technology, for use in the eld of
prevenon and treatment of human diseases (the
POTELLIGENT® License Agreement
). Pursuant to the POTELLIGENT® License Agreement, we are granted a non-exclusive right to use POTELLIGENT® to research, develop and commercialize
anbodies and products containing such anbodies using POTELLIGENT®. BioWa retains a right of rst negoaon for the
exclusive right to develop and commercialize, in certain countries only, any product we develop using POTELLIGENT®. We
successfully applied POTELLIGENT® to cusatuzumab, an an-CD70 mAb, and ARGX-111, an an-c-Met mAb, under the
POTELLIGENT® License Agreement.
Upon commercializaon of our products developed using POTELLIGENT®, we will be obligated to pay BioWa a percentage
of net sales of a licensed product as a royalty. This royalty varies with net sales volume, ranging in the low single digits,
and it is reduced by half if during the following ten years from the rst commercial sale of the product in a country the
last valid claim within the licensed patent(s) that covers the product expires or ends. In addion, we must make annual
research license maintenance payments which cease with commencement of our royalty payments to BioWa. We have
diligence requirements with respect to the connuaon of development and commercializaon of products. We have
also assumed certain development, regulatory and commercial milestone payment obligaons and must report on
our progress toward achieving these milestones on an annual basis. Milestones are to be paid on a commercial tar
-
get-by-commercial target basis, and we are obligated to make milestone payments in aggregate amounts of up to $36.0
million per commercial target should we achieve annual global sales of over $1.0 billion.
Pursuant to the POTELLIGENT® License Agreement, we have the right to grant sublicenses to third pares.
We may terminate the POTELLIGENT® License Agreement at any me by sending BioWa prior wrien noce. Absent early
terminaon, the POTELLIGENT® License Agreement will automacally expire upon the expiry of our royalty obligaons
under the POTELLIGENT® License Agreement. In the event the POTELLIGENT® License Agreement is terminated for any
reason, the license granted to us would terminate but BioWa would grant our sublicensees a direct license following such
terminaon. In the event the POTELLIGENT® License Agreement is terminated other than for our breach or insolvency,
we would retain the right to sell licensed products then on hand for a certain period of me post-terminaon.
1.5.10 Our Non-Exclusive Licenses with BioWa and Lonza for POTELLIGENT® CHOK1SV
To scale up producon of our product candidates cusatuzumab and ARGX-111 for clinical trial and commercial supply,
we required a license to a GMP cell line in which POTELLIGENT® anbodies could be expressed. This cell line,
POTELLI
-
GENT® CHOK1SV
, was jointly developed by BioWa and Lonza. In December 2013 and August 2014, respecvely, we en
-
tered into non-exclusive commercial in-license agreements for cusatuzumab and ARGX-111 with BioWa and Lonza Sales
AG (Lonza) for the use of certain patents and know-how relang to the POTELLIGENT® CHOK1SV technology, which is a
combinaon of Lonza’s GS system and BioWa’s POTELLIGENT® plaorm technology, for use in the eld of prevenon and
treatment of human diseases. Under the terms of each commercial license, we received a non-exclusive right to
research, develop and commercialize products containing an anbody generated specically against a specic target
using POTELLIGENT® CHOK1SV, namely the target CD70 in the case of cusatuzumab and c-Met in the case of ARGX-111.
Both targets are designated as reserved targets under the POTELLIGENT® License Agreement, which connues to govern
our research, development and commercializaon of products ulizing POTELLIGENT®. Under the terms of each commer
-
cial license, BioWa retains a right of rst negoaon for the exclusive right to develop and commercialize, in certain coun
-
tries only, any product we develop using POTELLIGENT® CHOK1SV. This right of rst negoaon is not applicable in cases
62 | License Agreements License Agreements | 63
PART I
where we intend to grant a global license to a third party to develop and commercialize a product. BioWa retains a right
of rst negoaon for the exclusive right to develop and commercialize our an-c-Met anbody ARGX-111, in certain
countries only.
Upon commercializaon of our products developed using POTELLIGENT® CHOK1SV, we will be obligated to pay both Bio
-
Wa and Lonza a percentage of net sales as a royalty. We are required to pay a royalty to BioWa on net sales for any specif
-
ic licensed product under only one license – either the POTELLIGENT® License Agreement or the agreement in relaon to
POTELLIGENT® CHOK1SV, but not both. The BioWa royalty is ered, ranging in the low single digits and is reduced by half
if during the following ten years from the rst commercial sale of the product in a country the last valid claim within the
licensed BioWa patent(s) that covers the product expires or ends. The Lonza royalty varies based on whether the product
is manufactured by Lonza, us or a third party, but in any event is in the low single digits and is reduced by half if during
the following ten years from the rst commercial sale of the product in a country the last valid claim within the licensed
Lonza patent(s) that covers the product expires or ends. In addion, we must make annual commercial license mainte
-
nance payments to BioWa on a per product basis which cease with commencement of payment of the BioWa royalty for
the respecve product, and annual payments to Lonza in the event that any product is manufactured by a party other
than Lonza, us or one of our aliates or strategic partners named in the agreement.
We have assumed certain development, regulatory and commercial milestone payment obligaons to both BioWa and
Lonza and must report on our progress toward achieving these milestones on an annual basis. We are required to pay
such milestones to BioWa under only one license – either the POTELLIGENT® License Agreement or the agreement
in relaon to POTELLIGENT® CHOK1SV, but not both. Payments related to the development and commercializaon of
cusatuzumab and ARGX-111 are foreseen under their respecve POTELLIGENT® CHOK1SV agreements. Milestones are to
be paid on a product-by-product basis, and we are obligated to make development, regulatory and commercial milestone
payments to BioWa in aggregate amounts of up to $36.0 million per product should we achieve global annual sales of
$1.0 billion. We are obligated to make development, regulatory and commercial milestone payments to Lonza per prod
-
uct, also depending on such product being manufactured by Lonza, us or one of our aliates or strategic partners
or otherwise.
Under the terms of both cusatuzumab and ARGX-111 commercial licenses, we have the right to grant sublicenses to cer
-
tain pre-approved third pares, but otherwise must obtain BioWa and Lonza’s prior wrien consent.
We may terminate any of the non-exclusive commercial license agreements at any me by sending BioWa and/or Lonza
prior wrien noce. Absent early terminaon, the agreements will automacally expire upon the expiry of our royalty
obligaons under the respecve agreement. In the event an agreement is terminated for any reason, the license granted
to us would terminate but BioWa and Lonza would grant our respecve sublicensees a direct license following such
terminaon. In the event an agreement is terminated other than for our failure to make milestone or royalty payments,
we would retain the right to sell the respecve products then on hand for a certain period of me post-terminaon. Our
royalty payment obligaons expire, on a product-by-product and country-by-country basis, on the date that is the later of
(i) ten years aer the rst commercial sale of such product sold in that country under the agreement or (ii) such me as
there are no valid claims covering such product.
1.5.11 Our non-exclusive license with Lonza for Multi-product GS Xceed-License
On February 4, 2015 we entered into a non-exclusive mul-product in-license agreement with Lonza (the
Mul-Product
Agreement
) for use of Lonza’s proprietary glutamine synthetase gene expression system known as GS Xceed™ consisng
of Chinese hamster ovary cell line and the vectors for the manufacturing of drug substance (the System). The System is
used for the manufacturing of efgargimod, cusatuzumab ARGX-117, ARGX-119 and LP0145.
Pursuant to the Mul-Product Agreement, we have the right to grant sublicenses to certain pre-approved third pares
without prior wrien consent of Lonza, but otherwise must obtain Lonza’s prior wrien consent.
We have assumed certain development, regulatory and commercial milestone payment obligaons to Lonza. We are
required to pay such milestones only in respect of the rst product manufactured using the System. We are obligated to
make development, regulatory and commercial milestone payments to Lonza in aggregate amounts of up to £575,000 for
the rst product manufactured by Lonza, us or one of our aliates or strategic partners. Through December 31, 2021, we
have paid Lonza an aggregate amount of £0.4 million, which includes milestone payments made under the Mul-Product
Agreement. Upon commercializaon of our products developed using the System, we will be obligated to pay Lonza a
percentage of net sales as a royalty for each product manufactured. The Lonza royalty is ered, ranging in the low single
digits and is reduced by half if the product in a country is not protected by a valid claim.
We may terminate the Mul-Product Agreement on a product-by-product basis by giving Lonza prior wrien noce.
Lonza may terminate the Mul-Product Agreement solely in case of breach or insolvency events. Absent early termina
-
on, the Mul-Product Agreement will automacally expire upon the expiry of the last valid claim for such product. We
or our strategic partners would retain the right to sell the respecve products then on hand post-terminaon.
1.5.12 Our Collaboration with UCL and Sopartec for GARP
In January 2013, we entered into a collaboraon and exclusive product license agreement with Université Catholique de
Louvain (
UCL
) and its technology transfer company Sopartec S.A. (Sopartec) to discover and develop novel human thera-
peuc anbodies against GARP (the
GARP Agreement
). Pursuant to the GARP Agreement, each party was responsible for all of its own costs and in connecon with the acvies assigned to it under a mutually agreed research plan.
In January 2015, we exercised the opon we had been granted under the GARP Agreement to enter into an exclusive,
worldwide commercial in-license for use of certain GARP-related intellectual property rights owned by UCL and the
Ludwig Instute for Cancer Research to further develop and commercialize licensed products, including the GARP-neu
-
tralizing anbody ARGX-115 (ABBV-151) which was discovered under the original collaboraon (the
GARP License
).
Upon the expiraon of the GARP Agreement, the GARP License would become a fully paid up, perpetual worldwide
exclusive license under the GARP intellectual property for any purpose, subject to UCL’s retenon of non-commercial
research rights.
Pursuant to the GARP License, we may grant sublicenses to third pares and aliates of such third pares. From any
income we receive in connecon with these sublicenses, such as in connecon with AbbVie Collaboraon Agreement,
we must pay Sopartec a percentage of that income in the lower teen digit range. Royalty payment obligaons expire on
a product-by-product and country-by-country basis when there are no valid claims covering the ARGX-115 (ABBV-151)
product. We also have diligence obligaons with respect to the connued development and commercializaon of ARGX-
115 (ABBV-151) products.
1.5.13 Our Exclusive License with NYU Langone Health and LUMC for ARGX-119
In 2019 and 2020, we entered into collaboraon and exclusive license agreements with NYU Langone Health and LUMC
under our immunology innovaon program to develop anbodies targeng the MuSK, for the treatment neuromuscular
diseases, which play a major role at the neuromuscular juncon (the
NYU
and LUMC Agreements
). Pursuant to the NYU
and LUMC Agreements, we, NYU and LUMC jointly developed anbodies against MuSK using our proprietary suite of
technologies. Under the NYU and LUMC Agreements, as amended, we are obligated to make milestone payments upon
the occurrence of certain development milestones, commercializaon milestones and pay ered royales on net sales in
the low single digits.
64 | License Agreements License Agreements | 65
PART I
1.6 Distribution Agreements
1.6.1 Our Exclusive Distribution Agreement with Medison for efgartigimod
In October 2021, we announced an exclusive distribuon agreement with Medison to commercialize efgargimod for
gMG in Israel; under the agreement, Medison will also be responsible for seeking requisite regulatory approvals.
1.6.2 Our Exclusive Distribution Agreement with Genpharm for efgartigimod
On January 18, 2022, we entered into a partnership agreement with Genpharm Services FZ-LLC (
Genpharm
), under which Genpharm shall purchase VYVGART™ from us for the resale in the Gulf Cooperaon Council (
GCC
) on an exclusive basis for Genpharm’s own account and own name (the
Genpharm Agreement
).1.7 Manufacturing and Supply
We ulize third-party contract manufacturers who act in accordance with the FDA’s good laboratory pracces (
GLP
) and current good manufacturing pracces (
cGMP
) for the manufacture of drug substance and drug product. At the date of this URD, we contract with Lonza based in Slough, United Kingdom, Portsmouth, U.S. and Singapore for all acvies relat
-
ing to the development of our cell banks, development of our manufacturing processes and the manufacturing of all drug
substance, thereby using validated and scalable systems broadly accepted in our industry. We use addional contract
manufacturers to ll, label, package, store and distribute invesgaonal drug products.
Efgargimod, cusatuzumab, ARGX-111, ARGX-117, ARGX-119 and LP0145 are each manufactured using the System, which
includes an industry-standard mammalian cell culture of a Chinese hamster ovary cell line that expresses the product,
followed by mulple puricaon and ltraon steps typically used in producing monoclonal anbodies. See also secon
1.5.11 “Our non-exclusive license with Lonza for Mul-product GS Xceed-License”.
All of our anbodies are manufactured by starng with cells, which are stored in a cell bank. We have one master cell
bank for each product manufactured in accordance with cGMP. Half of each master cell bank is stored at a separate site
to ensure that, in case of a catastrophic event at one site, sucient vials of the master cell bank would remain at the
alternave storage site to connue manufacturing.
1.8 Intellectual Property
1.8.1 Introduction
We strive to protect the proprietary technologies that we believe are important to our business, including pursuing and
maintaining patent protecon intended to cover the plaorm technologies incorporated into, or used to produce, our
product candidates, the composions of maer of our product candidates and their methods of use, as well as other
invenons that are important to our business. In addion to patent protecon, we also rely on trademarks and trade
secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent
protecon, including certain aspects of our llama immunizaon and anbody anity maturaon approaches.
66 | Distribution Agreements
Our commercial success depends in part upon our ability to obtain and maintain patent and other proprietary protecon
for commercially important technologies, invenons and know-how related to our business, defend and enforce our
intellectual property rights, parcularly our patent rights, preserve the condenality of our trade secrets and operate
without infringing valid and enforceable intellectual property rights of others. Specically, we are materially dependent
on patent and other proprietary protecon related to our core plaorm technologies, described in chapter 1.8.2 –Plat
-
form Technologies, and our product candidates, as described in chapter 1.8.3 – Product Candidates: Our Wholly-Owned
Programs and chapter 1.8.4 – Product Candidates: Our Partnered Programs.
The patent posions for biotechnology companies like us are generally uncertain and can involve complex legal, scienc
and factual issues. In addion, the coverage claimed in a patent applicaon can be signicantly reduced before a patent
is issued, and its scope can be reinterpreted and even challenged aer issuance. As a result, we cannot guarantee that
any of our plaorm technologies and product candidates will be protectable or remain protected by enforceable patents.
We cannot predict whether the patent applicaons we are currently pursuing will issue as patents in any parcular juris
-
dicon or whether the claims of any issued patents will provide sucient proprietary protecon from competors. Any
patents that we hold may be challenged, circumvented or invalidated by third pares.
As of January 1, 2022, our patent porolio (which includes both proprietary and in-licensed patent families) comprises
approximately 300 granted patents and approximately 308 pending patent applicaons, including approximately 35
issued U.S. patents, approximately 15 granted European patents and approximately 250 issued patents in other
jurisdicons.
1.8.2 Platform Technologies
With regard to our plaorm technologies, we own or have intellectual property rights directed to our SIMPLE Anbody™
discovery plaorm, the ABDEG™ and NHance® plaorms and the POTELLIGENT® plaorm.
With regard to our SIMPLE Anbody™ discovery plaorm, we own a patent family containing six issued U.S. patents with
composion of maer claims directed to chimeric anbodies containing variable domains comprising CDRs obtained
from convenonal heterotetrameric llama anbodies fused to one or more domains of a human anbody, polynucle
-
odes encoding such chimeric anbodies, libraries of expression vectors comprising cDNA sequences encoding camelid
anbodies, method claims directed to the preparaon of such chimeric anbodies, and methods of modulang the bind
-
ing of a human target angen to its ligand or receptor by administering such a chimeric anbody. The U.S. patents are
expected to expire in 2029 to 2033. In addion, the patent family contains patents that have been granted in Australia,
Canada, Europe, the United Kingdom, Israel, India and Japan, and pending applicaons in China and Japan (divisional).
In addion, we have a second patent family containing patents granted in the United States (two), Australia, Europe,
the United Kingdom, Israel, India and Japan, and one patent applicaon pending in Canada, with composion of maer
claims directed to a chimeric anbody containing variable regions with CDRs derived from a llama anbody and certain
amino acid substuons corresponding to amino acids present in a human germline variable region. The granted patents
have a basic patent expiry date in 2031.
With regard to the ABDEG™ plaorm, we co-own with, and exclusively license from, the University of Texas, a patent fam
-
ily containing a granted U.S. patent with composion of maer claims directed to an isolated FcRn-antagonist comprising
a variant immunoglobulin Fc region having an increased anity for an Fc gamma receptor relave to a wild-type IgG1 Fc
region, and method of use claims directed to a method of using such an FcRn-antagonist to treat certain anbody medi
-
ated disorders. The U.S. parent patent expires in 2036 (including patent term adjustment). In addion, in this patent fam
-
ily, we also have granted patents in Australia, China, Eurasia, Europe, Japan, Macao, Mexico, New Zealand and Singapore,
and we have 13 patent applicaons pending in U.S. (divisional) and various other countries and regions in North America,
South America, Europe, Asia and South Africa. The granted patents have a basic expiry date in 2034. In addion, we own
a second patent family containing pending patent applicaons in the United States and 15 other jurisdicons with claims
directed to methods of reducing the serum levels of an Fc-containing agent in a subject by administering to the subject
an FcRn-antagonist containing a variant immunoglobulin Fc region containing certain amino acid substuons. A U.S.
patent, if issued from the U.S. patent applicaon, is expected to expire in 2036.
PART I
Intellectual Property | 67
68 | Intellectual Property
With regard to the NHance® plaorm, we have exclusively licensed from the University of Texas two U.S. patents with
composion of maer claims directed to an IgG molecule comprising a variant human Fc domain, and method of use
claims directed to a method of blocking FcRn funcon in a subject by providing to the subject such an IgG molecule. The
U.S. patents are expected to expire earliest in 2027 to 2028. The patent family also includes a granted European patent.
With regard to the POTELLIGENT® plaorm, which is currently used in the producon of our cusatuzumab product candi
-
date, we have non-exclusively licensed from BioWa certain intellectual property rights that relate to dierent aspects of
the POTELLIGENT® plaorm.
1.8.3 Product Candidates: Our Wholly-Owned Programs
Efgargimod
With regard to efgargimod, efgargimod incorporates the ABDEG™ plaorm technology.
Our ARGX-117 Product Candidate
With regard to the ARGX-117 product candidate, we own or have rights in three patent families (including one in-licensed
patent family from Broteio) with several granted patents and pending patent applicaons in mulple jurisdicons in
North America, South America, Europe and Asia, directed to composion of maer claims and method of treatment
claims. The in-licensed patent family from Broteio has granted patents in Australia, China, Europe, Hong Kong, Mexico
and U.S. (two issued patents in U.S.), which have a basic expiry date in 2034. The other two patent families have basic
expiry dates in 2039 and 2040.
Our ARGX-119 Product Candidate
With regard to the ARGX-119 product candidate, we in-licensed two patent families from/with NYU Langone Health,
a U.S. medical center based in New York, and three patent families from/with the Leiden University Medical Center
(
LUMC
), a Dutch University Hospital based in Leiden, with one U.S. granted patent and several pending applicaons in
mulple jurisdicons.
Our ARGX-118 Product Candidate
With regard to the ARGX-118 product candidate, we co-own one patent family with VIB vzw (VIB), an inammaon re
-
search center in Ghent, Brussels, and Universiteit Gent, with one U.S. granted patent and pending patent applicaons in
mulple jurisdicons in North America, South America, Europe and Asia. The patent family has a basic expiry date in 2039.
Our Cusatuzumab Product Candidate
With regard to the cusatuzumab product candidate, we have four issued U.S. patents, and one allowed U.S. patent
applicaon, including, one U.S. granted patent with composion of maer claims directed to the cusatuzumab anbody,
one U.S. granted patent with claims directed to the epitope cusatuzumab binds to, one U.S. granted patent with claims
directed to a polynucleode that encodes anbodies that bind to the epitope cusatuzumab binds to, and, one U.S. grant
-
ed patent and one U.S. allowed patent applicaon with method of use claims directed to the treatment of cancer and
immunological disorders with the cusatuzumab anbody. The issued U.S. patents expire in 2032 and 2033, without taking
a potenal patent term extension into account. In addion, we have patents that have been granted in Australia, China,
Europe, Indonesia, Israel, India, Japan and Russia and patent applicaons pending in Brazil and Canada. Cusatuzumab
incorporates or employs the SIMPLE Anbody™ and POTELLIGENT® plaorm technologies.
1.8.4 Product Candidates: Our Partnered Programs
Our ARGX-115 (ABBV-151) Product Candidate
With regard to the ARGX-115 (ABBV-151) product candidate, we co-own with, and exclusively license from, the Ludwig
Instute for Cancer Research and Université Catholique de Louvain, a granted U.S. patent with composion of maer
claims directed to an anbody that binds GARP the presence of TGF-β and method of use claims directed to the use of
such an anbody in the treatment of cancer. The U.S. patent has a basic expiry date in 2034, without taking a potenal
patent term extension into account. In addion, the patent family contains at least 18 patent applicaons pending in
U.S. (connuaon-in-part) and various other countries and regions in North America, South America, Europe and Asia.
Further, we co-own with, and exclusively license from, the Université Catholique de Louvain two more patent families
with composion of maer claims directed to an anbody that binds an epitope of a complex formed by human GARP
and TGF-β as well as method of use claims directed to the use of such an anbody in the treatment of cancer. These two
patent families have basic expiry dates in 2036 and 2038. Furthermore, ARGX-115 (ABBV-151) incorporates or employs
the SIMPLE Anbody™ plaorm technology.
Our ARGX-109 Product Candidate
With regard to the ARGX-109 product candidate, we have one patent family with composion of maer claims directed
to ARGX-109. This patent family has granted patents in Australia, Canada, Chile, China, Colombia, Hong Kong, Israel,
Japan, Mexico, New Zealand, Russia, U.S. and South Africa, and pending patent applicaons in Brazil, India and U.S. (di
-
visional applicaon). The patent family has a basic expiry date in 2033. Furthermore, ARGX-109 incorporates or employs
the SIMPLE Anbody™ plaorm technology and the NHance® plaorm technology.
Our ARGX-112 (LP-0145) Product Candidate
With regard to the ARGX-112 (LP-0145) product candidate, we have one patent family with composion of maer claims
directed to an anbody that binds human IL-22R. The patent family has a basic expiry date in 2037. Furthermore, ARGX-
112 (LP-0145) incorporates the SIMPLE Anbody™ plaorm technology.
The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained.
In most countries in which we le, the patent term is 20 years from the earliest date of ling a non-provisional patent
applicaon.
In the U.S., the term of a patent covering an FDA-approved drug may be eligible for a patent term extension under the
Hatch-Waxman Act as compensaon for the loss of patent term during the FDA regulatory review process. The period of
extension may be up to ve years beyond the expiraon of the patent but cannot extend the remaining term of a patent
beyond a total of 14 years from the date of product approval. Only one patent among those eligible for an extension may
be extended. Similar provisions are available in Europe and in certain other jurisdicons to extend the term of a patent
that covers an approved drug. It is possible that issued U.S. patents covering each of our product candidates may be
entled to patent term extensions. If our product candidates receive FDA approval, we intend to apply for patent term
extensions, if available, to extend the term of patents that cover the approved product candidates. We also intend to
seek patent term extensions in any jurisdicons where they are available, however, there is no guarantee that the appli
-
cable authories, including the FDA, will agree with our assessment of whether such extensions should be granted, and if
granted, the length of such extensions.
1.8.5 Trade Secret Protection
In addion to patent protecon, we also rely on trade secret protecon for our proprietary informaon that is not
amenable to, or that we do not consider appropriate for, patent protecon, including, for example, certain aspects of
our llama immunizaon and anbody anity maturaon approaches. However, trade secrets can be dicult to protect.
Although we take steps to protect our proprietary informaon, including restricng access to our premises and our
condenal informaon, as well as entering into agreements with our employees, consultants, advisors and potenal
collaborators, third pares may independently develop the same or similar proprietary informaon or may otherwise
gain access to our proprietary informaon. As a result, we may be unable to meaningfully protect our trade secrets and
proprietary informaon.
PART I
Intellectual Property | 69
Zach Leans on his
Support System to Help
Manage his Myasthenia
Gravis*
Zach
Three years passed between the beginning of Zach’s symptoms and his
myasthenia gravis (MG) diagnosis. Already dealing with mulple health
problems related to a primary immune deciency, he was frustrated when
these new, undiagnosed symptoms muddied the waters and made it more
dicult to get the care he needed.
70 | Patient Story
Patient Story | 71
PART I
How has life changed because of
myasthenia gravis?
Everything changed. I used to be able to do everyday
things, like cooking, cleaning and going shopping. I was
able to paint and draw, as I had done all my life. Even aer
I was on disability, I was sll able to do most things with a
lile help. However, by the me I was diagnosed with MG,
I could barely breathe and hardly stand. I couldn’t hold a
paintbrush or a sketchbook. It felt like so much had been
taken away from me.
Shortly aer I was diagnosed, I bought a house in Oregon
with accessibility modicaons that would allow me to sll
be able to do some things on my own. It has a kitchen with
low counters so I can do things while in my chair, a stair li
to get me between oors and accessible bathrooms with a
roll-in shower.
By the me I was diagnosed with MG, I could barely
breathe and hardly stand.
How did you adapt to all these changes
going on in your life?
Mentally, I had to accept that everything had changed. I
redened my enre sense of self. How we see ourselves is
connected to what we do, and when I went on disability
and received my MG diagnosis, I had to stop dening myself
as a user interface designer. I’ve struggled with health prob
-
lems for most of my life, but MG was the one that really
made me reframe my life.
But I didn’t slip into a “woe is me” mentality aer my MG
diagnosis. I try not to let my limitaons from my MG frus
-
trate me. Also, I see a therapist and I’m acve in several
online communies for myasthenia gravis. Having people
that I can talk to who know what it’s like to have MG has
been a comfort, and I’ve learned so much from them.
Where do you turn for support during
a bad day?
I’ve found a lot of support from online communies. The
people in my groups don’t live close by, but they are there
to give me mental and emoonal support when I need it.
My sister lives in Tennessee, but she’s always there to talk
when I want.
Patient
Story
*Paid contributor to MG United.
72 | Regulation
1.9 Regulation
Government authories in the U.S., at the federal, state and local level, and in the European Union and other countries
and jurisdicons, extensively regulate, among other things, the research, development, tesng, manufacture, quality
control, approval, packaging, storage, recordkeeping, labeling, adversing, promoon, distribuon, markeng, post-ap
-
proval monitoring and reporng, and import and export of pharmaceucal products, including biological products. In
addion, some jurisdicons regulate the pricing of pharmaceucal products. The processes for obtaining markeng
approvals in the U.S. and in other countries and jurisdicons, along with subsequent compliance with applicable statutes
and regulaons and other regulatory authories, require the expenditure of substanal me and nancial resources.
1.9.1 Licensure and Regulation of Biologics in the U.S.
In the U.S., our product candidates and products are regulated as biological products, or biologics, under the Public
Health Service Act (
PHSA
), and the Federal Food, Drug, and Cosmetic Act (FDCA
) and their implementing regula-
tions. The failure to comply with the applicable U.S. requirements at any time during the product development
process, including nonclinical testing and clinical testing, the approval process or post-approval process may subject
an applicant to delays in the conduct of a study, regulatory review and approval, and/or administrative or judicial
sanctions. These sanctions may include, but are not limited to, the FDA’s refusal to allow an applicant to proceed
with clinical testing, refusal to approve pending applications, license suspension or revocation, warning or untitled
letters, adverse publicity, product recalls, product seizures, total or partial suspension of production or distribution,
injunctions, fines and civil or criminal investigations and penalties brought by the FDA or the Department of Justice
or other governmental entities.
An applicant seeking approval to market and distribute a new biologic in the U.S. generally must sasfactorily complete
each of the following steps:
• nonclinical laboratory tests, animal studies and formulaon studies all performed in accordance with applicable
regulaons, including the GLP regulaons;
• submission to the FDA of an IND applicaon for human clinical tesng, which must become eecve before human
clinical trials may begin;
• approval by an instuonal review board (IRB) represenng each clinical site before each clinical trial may be iniated;
• performance of adequate and well-controlled human clinical trials to establish the safety, potency and purity of the
product candidate for each proposed indicaon, in accordance with Good Clinical Pracces (
GCP
);• preparaon and submission to the FDA of a BLA for a biological product requesng markeng for one or more pro
-
posed indicaons, including submission of detailed informaon on the manufacture and composion of the product in
clinical development and proposed labeling;
• review of the product by an FDA advisory commiee, if applicable;
• one or more FDA inspecons of the manufacturing facility or facilies, including those of third pares, at which the
product, or components thereof, are produced to assess compliance with cGMP requirements and to assure that the
facilies, methods and controls are adequate to preserve the product’s identy, strength, quality and purity;
• FDA audits of the clinical study sites to assure compliance with GCPs, and the integrity of clinical data in support of the BLA;
• payment of user fees and securing FDA approval of the BLA and licensure of the new biological product; and
• compliance with any post-approval requirements, including the potenal requirement to implement a risk evaluaon
and migaon strategy (
REMS
) and any post-approval studies required by the FDA.Nonclinical Studies and Invesgaonal New Drug Applicaon
Before tesng any biological product candidate in humans, the product candidate must undergo nonclinical tesng.
Nonclinical tests include laboratory evaluaons of product chemistry, formulaon and stability, as well as animal studies
to evaluate the potenal for acvity and toxicity. The conduct of the nonclinical tests and formulaon of the compounds
for tesng must comply with federal regulaons and requirements. The results of the nonclinical tests, together with
manufacturing informaon and analycal data, are submied to the FDA as part of an IND applicaon. The IND automat
-
ically becomes eecve 30 days aer receipt by the FDA, unless before that me the FDA raises concerns or quesons
about the product candidate or conduct of the proposed clinical trial, including concerns that human research subjects
will be exposed to unreasonable health risks. In that case, the IND sponsor and the FDA must resolve any outstanding
FDA concerns before the clinical trial can begin.
As a result, submission of the IND may result in the FDA not allowing the trial to commence or on the terms originally
specied by the sponsor in the IND. If the FDA raises concerns or quesons either during this inial 30-day period, or at
any me during the IND process, it may choose to impose a paral or complete clinical hold. This order issued by the FDA
would delay either a proposed clinical study or cause suspension of an ongoing study, or in the case of a paral clinical
hold place limitaons on the conduct of the study such as duraon of treatment, unl all outstanding concerns have
been adequately addressed and the FDA has noed the company that invesgaon may proceed and then only under
terms authorized by the FDA. This could cause signicant delays or dicules in compleng planned clinical trials in a
mely manner. The FDA may impose clinical holds on a biological product candidate at any me before or during clinical
trials due to safety concerns or non-compliance.
Human Clinical Trials in Support of a BLA
Clinical trials involve the administraon of the invesgaonal product candidate to healthy volunteers or paents with
the disease to be treated under the supervision of a qualied principal invesgator in accordance with GCP requirements.
Clinical trials are conducted under study protocols detailing, among other things, the objecves of the study, inclusion and
exclusion criteria, the parameters to be used in monitoring safety, and the eecveness criteria to be evaluated. A proto
-
col for each clinical trial and any subsequent protocol amendments must be submied to the FDA as part of the IND.
A sponsor who wishes to conduct a clinical trial outside the U.S. may, but need not, obtain FDA authorizaon to conduct
the clinical trial under an IND. If a foreign clinical trial is not conducted under an IND, the sponsor may submit data from
the clinical trial to the FDA in support of the BLA so long as the clinical trial is well-designed and well-conducted in accor
-
dance with GCP, including review and approval by an independent ethics commiee, and the FDA is able to validate the
study data through an onsite inspecon, if necessary.
Further, each clinical trial must be reviewed and approved by the IRB either centrally or individually at each instuon at
which the clinical trial will be conducted. The IRB will consider, among other things, clinical trial design, paent informed
consent, ethical factors and the safety of human subjects. An IRB must operate in compliance with FDA regulaons. The
FDA, IRB, or the clinical trial sponsor may suspend or disconnue a clinical trial at any me for various reasons, including
a nding that the clinical trial is not being conducted in accordance with FDA requirements or the subjects or paents are
being exposed to an unacceptable health risk. Clinical tesng also must sasfy extensive GCP rules and the requirements for
informed consent. Addionally, some clinical trials are overseen by an independent group of qualied experts organized by
the clinical trial sponsor, known as a data safety monitoring board or commiee. This group may recommend connuaon
of the study as planned, changes in study conduct, or cessaon of the study at designated check points based on access to
certain data from the study. Informaon about certain clinical studies must be submied within specic meframes to the
Naonal Instutes of Health for public disseminaon at www.clinicaltrials.gov.
Clinical trials typically are conducted in three sequenal phases, but the phases may overlap or be combined. Addional
studies may be required aer approval.
• Phase 1 clinical trials are inially conducted in a limited populaon to test the product candidate for safety, including
adverse eects, dose tolerance, absorpon, metabolism, distribuon, excreon and pharmacodynamics in healthy
humans or, on occasion, in paents, such as cancer paents.
• Phase 2 clinical trials are generally conducted in a limited paent populaon to idenfy possible adverse eects and
safety risks, evaluate the ecacy of the product candidate for specic targeted indicaons and determine dose toler
-
ance and opmal dosage. Mulple Phase 2 clinical trials may be conducted by the sponsor to obtain informaon prior
to beginning larger Phase 3 clinical trials.
• Phase 3 clinical trials proceed if the Phase 2 clinical trials demonstrate that a dose range of the product candidate is
potenally eecve and has an acceptable safety prole. Phase 3 clinical trials are undertaken within an expanded
paent populaon to gather addional informaon about safety and eecveness necessary to evaluate the overall
benet-risk relaonship of the drug and to provide an adequate basis for physician labeling.
PART I
74 | Regulation
In some cases, the FDA may approve a BLA for a product candidate but require the sponsor to conduct addional clinical
trials to further assess the product candidate’s safety and eecveness aer approval. Such post-approval trials are
typically referred to as Phase 4 clinical trials. These studies are used to gain addional experience from the treatment of
paents in the intended therapeuc indicaon and to document a clinical benet in the case of biologics approved under
accelerated approval regulaons. If the FDA approves a product while a company has ongoing clinical trials that were not
necessary for approval, a company may be able to use the data from these clinical trials to meet all or part of any Phase
4 clinical trial requirement or to request a change in the product labeling. Failure to exhibit due diligence with regard to
conducng required Phase 4 clinical trials could result in withdrawal of approval for products.
Progress reports detailing the results of the clinical trials, among other informaon, must be submied at least annually
to the FDA and wrien IND safety reports must be submied to the FDA and the invesgators een days aer the trial
sponsor determines the informaon qualies for reporng for serious and unexpected suspected adverse events, nd
-
ings from other studies or animal or in vitro tesng that suggest a signicant risk for human subjects and any clinically
important increase in the rate of a serious suspected adverse reacon over that listed in the protocol or invesgator
brochure. The sponsor must also nofy the FDA of any unexpected fatal or life-threatening suspected adverse reacon as
soon as possible but in no case later than seven calendar days aer the sponsor’s inial receipt of the informaon.
A drug being studied in clinical trials may be made available to individual paents in certain circumstances. Pursuant to
the 21st Century Cures Act, as amended, the manufacturer of an invesgaonal drug for a serious disease or condion
is required to make available, such as by posng on its website, its policy on evaluang and responding to requests for
individual paent access to such invesgaonal drug. This requirement applies on the earlier of the rst iniaon of a
Phase 2 or Phase 3 trial of the invesgaonal drug, or as applicable, 15 days aer the drug receives a designaon as a
breakthrough therapy, fast track product, or regenerave advanced therapy.
Compliance with cGMP Requirements
Before approving a BLA, the FDA typically will inspect the facility or facilies where the product is manufactured. The FDA
will not approve an applicaon unless it determines that the manufacturing processes and facilies are in full compliance
with cGMP requirements and adequate to assure consistent producon of the product within required specicaons.
The PHSA emphasizes the importance of manufacturing control for products like biologics whose aributes cannot be
precisely dened. The manufacturing process must be capable of consistently producing quality batches of the product
candidate and, among other things, the sponsor must develop methods for tesng the identy, strength, quality, potency,
and purity of the nal biological product. Addionally, appropriate packaging must be selected and tested, and stability
studies must be conducted to demonstrate that the biological product candidate does not undergo unacceptable deterio
-
raon over its shelf life.
Manufacturers and others involved in the manufacture and distribuon of products must also register their establish
-
ments with the FDA and certain state agencies. Both domesc and foreign manufacturing establishments must register
and provide addional informaon to the FDA upon their inial parcipaon in the manufacturing process. Any product
manufactured by or imported from a facility that has not registered, whether foreign or domesc, is deemed misbrand
-
ed under the FDCA. Establishments may be subject to periodic unannounced inspecons by government authories to
ensure compliance with cGMPs and other laws. Manufacturers may have to provide, on request, electronic or physical re
-
cords regarding their establishments. Delaying, denying, liming, or refusing inspecon by the FDA may lead to a product
being deemed to be adulterated.
Review and Approval of a BLA
The results of product candidate development, nonclinical tesng and clinical trials, including negave or ambiguous
results as well as posive ndings, are submied to the FDA as part of a BLA requesng a license to market the product.
The BLA must contain extensive manufacturing informaon and detailed informaon on the composion of the product
and proposed labeling as well as payment of a user fee.
The FDA has 60 days aer submission of the applicaon to conduct an inial review to determine whether the BLA is
sucient to accept for ling based on the agency’s threshold determinaon that it is suciently complete to permit
substanve review. If the FDA determines the BLA is not suciently complete, it will refuse the BLA. Once the submission
has been accepted for ling, the FDA begins an in-depth review of the applicaon. Under the goals and policies agreed
to by the FDA under the Prescripon Drug User Fee Act (
PDUFA
) the FDA has ten months in which to complete its inial
review of a standard applicaon and respond to the applicant, and six months for a priority review of an applicaon. The
FDA does not always meet its PDUFA goal dates for standard and priority reviews. The review process may be signicantly
extended by FDA requests for addional informaon or claricaon. The review process and the PDUFA goal date may
also be extended by three months if the FDA requests or if the applicant otherwise provides addional informaon or
claricaon regarding informaon already provided in the submission within the last three months before the PDUFA
goal date.
On the basis of the FDA’s evaluaon of the applicaon and accompanying informaon, including the results of the
inspecon of the manufacturing facilies and any FDA audits of clinical trial sites to assure compliance with GCPs, the
FDA may issue an approval leer, or a complete response leer. An approval leer authorizes commercial markeng of
the product with specic prescribing informaon for specic indicaons. Under the PHSA, the FDA may approve a BLA if
it determines that the product is safe, pure and potent and the facility where the product will be manufactured meets
standards designed to ensure that it connues to be safe, pure and potent. If the applicaon is not approved, the FDA
may issue a complete response leer, which will contain the condions that must be met in order to secure nal approval
of the applicaon, and when possible will outline recommended acons the sponsor might take to obtain approval of
the applicaon. Sponsors that receive a complete response leer may submit to the FDA informaon that represents a
complete response to the issues idened by the FDA or withdraw the applicaon or request a hearing. The FDA will not
approve an applicaon unl issues idened in the complete response leer have been addressed.
The FDA may also refer the applicaon to an advisory commiee for review, evaluaon and recommendaon as to
whether the applicaon should be approved. In parcular, the FDA may refer applicaons for novel biological products or
biological products that present dicult quesons of safety or ecacy to an advisory commiee. Typically, an advisory
commiee is a panel of independent experts, including clinicians and other scienc experts, that reviews, evaluates
and provides a recommendaon as to whether the applicaon should be approved and under what condions. The FDA
is not bound by the recommendaons of an advisory commiee, but it considers such recommendaons carefully when
making decisions.
If the FDA approves a new product, it may limit the approved indicaons for use of the product. It may also require that
contraindicaons, warnings or precauons be included in the product labeling. In addion, the FDA may call for post-ap
-
proval studies, including Phase 4 clinical trials, to further assess the product’s safety aer approval. The agency may also
require tesng and surveillance programs to monitor the product aer commercializaon, or impose other condions,
including distribuon restricons or other risk management mechanisms, including REMS, to help ensure that the bene
-
ts of the product outweigh the potenal risks. REMS can include medicaon guides, communicaon plans for healthcare
professionals, and elements to assure safe use (
ETASU
). ETASU can include, but are not limited to, special training or
cercaon for prescribing or dispensing, dispensing only under certain circumstances, special monitoring and the use
of patent registries. The FDA may prevent or limit further markeng of a product based on the results of post-market
studies or surveillance programs. Aer approval, many types of changes to the approved product, such as adding new
indicaons, manufacturing changes and addional labeling claims, are subject to further tesng requirements and FDA
review and approval.
Such regulatory reviews can result in denial or modicaon of the planned changes, or requirements to conduct addion
-
al tests or evaluaons that can substanally delay or increase the cost of the planned changes.
Fast Track, Breakthrough Therapy and Priority Review Designaons
The FDA is authorized to designate certain products for expedited review if they are intended to address an unmet
medical need in the treatment of a serious or life-threatening disease or condion. These programs are referred to as fast
track designaon, breakthrough therapy designaon and priority review designaon.
The FDA may designate a product for fast track review if it is intended, whether alone or in combinaon with one or
more other products, for the treatment of a serious or life-threatening disease or condion, and it demonstrates the
potenal to address unmet medical needs for such a disease or condion. For fast track products, sponsors may have
greater interacons with the FDA and the FDA may iniate review of secons of a fast track product’s applicaon before
the applicaon is complete. This rolling review may be available if the FDA determines, aer preliminary evaluaon of
PART I
clinical data submied by the sponsor, that a fast track product may be eecve. The sponsor must also provide, and the
FDA must approve, a schedule for the submission of the remaining informaon and the sponsor must pay applicable user
fees. However, the FDA’s me period goal for reviewing a fast track applicaon does not begin unl the last secon of the
applicaon is submied. Fast track designaon may be withdrawn by the FDA if the FDA believes that the designaon is
no longer supported by data emerging in the clinical trial process.
A product may be designated as a breakthrough therapy if it is intended, either alone or in combinaon with one or more
other products, to treat a serious or life-threatening disease or condion and preliminary clinical evidence indicates
that the product may demonstrate substanal improvement over exisng therapies on one or more clinically signicant
endpoints, such as substanal treatment eects observed early in clinical development. The FDA may take certain acons
with respect to breakthrough therapies, including holding meengs with the sponsor throughout the development pro
-
cess; providing mely advice to the product sponsor regarding development and approval; involving more senior sta in
the review process; assigning a cross-disciplinary project lead for the review team; and taking other steps to design the
clinical trials in an ecient manner.
The FDA may designate a product for priority review if it is a product that treats a serious condion and, if approved,
would provide a signicant improvement in safety or eecveness. The FDA determines, on a case-by-case basis, wheth
-
er the proposed product represents a signicant improvement when compared with other available therapies. Signicant
improvement may be illustrated by evidence of increased eecveness in the treatment of a condion, eliminaon or
substanal reducon of a treatment-liming product reacon, documented enhancement of paent compliance that
may lead to improvement in serious outcomes and evidence of safety and eecveness in a new subpopulaon. A priori
-
ty designaon is intended to direct overall aenon and resources to the evaluaon of such applicaons, and to shorten
the FDA’s goal for taking acon on a markeng applicaon from ten months to six months.
Accelerated Approval Pathway
The FDA may grant accelerated approval to a product for a serious or life-threatening condion that provides meaningful
therapeuc advantage to paents over exisng treatments based upon a determinaon that the product has an eect
on a surrogate endpoint that is reasonably likely to predict clinical benet or on a clinical endpoint that can be measured
earlier than an eect on irreversible morbidity or mortality (
IMM
) and that is reasonably likely to predict an eect on IMM or other clinical benet, taking into account the severity, rarity, or prevalence of the condion and the availability or
lack of alternave treatments. Products granted accelerated approval must meet the same statutory standards for safety
and eecveness as those granted tradional approval.
For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, ra
-
dio-graphic image, physical sign, or other measure that is thought to predict clinical benet but is not itself a measure
of clinical benet. Surrogate endpoints can oen be measured more easily or more rapidly than clinical endpoints. An
intermediate clinical endpoint is a measurement of a therapeuc eect that is considered reasonably likely to predict
the clinical benet of a product, such as an eect on IMM. The FDA has limited experience with accelerated approvals
based on intermediate clinical endpoints, but has indicated that such endpoints generally may support accelerated
approval where the therapeuc eect measured by the endpoint is not itself a clinical benet and basis for tradional
approval, if there is a basis for concluding that the therapeuc eect is reasonably likely to predict the ulmate clinical
benet of a product.
The accelerated approval pathway is most oen used in sengs in which the course of a disease is long and an extended
period of me is required to measure the intended clinical benet of a product, even if the eect on the surrogate or
intermediate clinical endpoint occurs rapidly. Thus, accelerated approval has been used extensively in the development
and approval of products for treatment of a variety of cancers in which the goal of therapy is generally to improve sur
-
vival or decrease morbidity and the duraon of the typical disease course requires lengthy and somemes large trials to
demonstrate a clinical or survival benet.
The accelerated approval pathway is usually conngent on a sponsor’s agreement to conduct, in a diligent manner,
addional post-approval conrmatory studies to verify and describe the product’s clinical benet. As a result, a product
candidate approved on this basis is subject to rigorous post-markeng compliance requirements, including the comple
-
on of Phase 4 or post-approval clinical trials to conrm the eect on the clinical endpoint. Failure to conduct required
post-approval studies, or conrm a clinical benet during post-markeng studies, would allow the FDA to withdraw the
product from the market on an expedited basis. Unless otherwise informed by the FDA, all promoonal materials for
product candidates approved under accelerated regulaons are subject to prior review by the agency.
Post-Approval Regulaon
If regulatory approval for markeng of a product or new indicaon for an exisng product is obtained, the sponsor will
be required to comply with all post-approval regulatory requirements as well as any post-approval requirements that
the FDA has imposed as part of the approval process. The sponsor will be required to report certain adverse reacons
and producon problems to the FDA, provide updated safety and ecacy informaon and comply with requirements
concerning adversing and promoonal labeling. Manufacturers and other pares involved in the drug supply chain for
prescripon drug and biological products must also comply with product tracking and tracing requirements and for no
-
fying the FDA of counterfeit, diverted, stolen and intenonally adulterated products or products that are otherwise unt
for distribuon in the U.S. Manufacturers and certain of their subcontractors are required to register their establishments
with the FDA and certain state agencies, and are subject to periodic unannounced inspecons by the FDA and certain
state agencies for compliance with ongoing regulatory requirements, including cGMP regulaons, which impose certain
procedural and documentaon requirements upon manufacturers. Accordingly, the sponsor and its third-party man
-
ufacturers must connue to expend me, money and eort in the areas of producon and quality control to maintain
compliance with cGMP regulaons and other regulatory requirements.
A biological product may also be subject to ocial lot release, meaning that the manufacturer is required to perform
certain tests on each lot of the product before it is released for distribuon. If the product is subject to ocial lot release,
the manufacturer must submit samples of each lot, together with a release protocol showing a summary of the history of
manufacture of the lot and the results of all of the manufacturer’s tests performed on the lot, to the FDA. The FDA may in
addion perform certain conrmatory tests on lots of some products before releasing the lots for distribuon. Finally, the
FDA will conduct laboratory research related to the safety, purity, potency and eecveness of pharmaceucal products.
Any distribuon of prescripon biological products and pharmaceucal samples must comply with the U.S. Prescripon
Drug Markeng Act and the PHSA.
Once an approval is granted, the FDA may revoke or suspend the approval of the BLA if compliance with regulatory
requirements and standards is not maintained or if problems occur aer the product reaches the market. Later discov
-
ery of previously unknown problems with a product, including adverse events of unancipated severity or frequency, or
with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved
labeling to add new safety informaon; imposion of post-market studies or clinical trials to assess new safety risks; or
imposion of distribuon or other restricons under a REMS program. FDA also has authority to require post-market
studies, in certain circumstances, on reduced eecveness of a product and may require labeling changes related to new
reduced eecveness informaon. Other potenal consequences for a failure to maintain regulatory compliance include,
among other things:
• restricons on the markeng or manufacturing of the product, complete withdrawal of the product from the market or
product recalls;
• nes, untled leers or warning leers or holds on post-approval clinical trials;
• refusal of the FDA to approve pending applicaons or supplements to approved applicaons, or suspension or revoca
-
on of product license approvals;
• product seizure or detenon, or refusal to permit the import or export of products; or
• injuncons or the imposion of civil or criminal penales.
The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market.
Pharmaceutical products may be promoted only for the approved indications and in accordance with the provi
-
sions of the approved label. Although physicians may prescribe legally available products for unapproved uses or in
patient populations that are not described in the product’s approved labeling (known as “off-label use”), companies
with approved products may not market or promote such off-label uses. The FDA does not regulate the behavior of
physicians in their choice of treatments, but the FDA regulations do impose stringent restrictions on manufactur
-
ers’ communications regarding off-label uses. The FDA and other agencies actively enforce the laws and regulations
prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses
PART I
76 | Regulation Regulation | 77
may be subject to significant liability, including investigation by federal and state authorities. Prescription biological
product promotional materials must be submitted to the FDA in conjunction with their first use or first publication.
Orphan Drug Designaon
Orphan drug designaon in the U.S. is designed to encourage sponsors to develop products intended for rare diseases
or condions. In the U.S., a rare disease or condion is statutorily dened as a condion that aects fewer than 200,000
individuals in the U.S. or that aects more than 200,000 individuals in the U.S. and for which there is no reasonable
expectaon that the cost of developing and making available the product for the disease or condion will be recovered
from sales of the product in the U.S.
Orphan drug designaon qualies a company for tax credits and market exclusivity for seven years following the date of
the product’s markeng approval if granted by the FDA and if it is the rst FDA approval for that product for the disease
for which it has such designaon. An applicaon for designaon as an orphan product can be made any me prior to the
ling of an applicaon for approval to market the product. A product becomes an orphan when it receives orphan drug
designaon from the Oce of Orphan Products Development (
OOPD
) at the FDA based on an acceptable condenal request made under the regulatory provisions. Aer the FDA grants orphan drug designaon, the generic identy of the
product and its potenal orphan use are disclosed publicly by the FDA. The product must then go through the review and
approval process like any other product in order to be marketed.
A sponsor may request orphan drug designaon of a previously unapproved product or new orphan indicaon for an
already marketed product. In addion, a sponsor of a product that is otherwise the same product as an already approved
orphan drug may seek and obtain orphan drug designaon for the subsequent product for the same rare disease or
condion if it can present a plausible hypothesis that its product may be clinically superior to the rst drug. More than
one sponsor may receive orphan drug designaon for the same product for the same rare disease or condion, but each
sponsor seeking orphan drug designaon must le a complete request for designaon.
The period of exclusivity begins on the date that the markeng applicaon is approved by the FDA and applies only to the
indicaon for which the product has been designated. The FDA may approve a second applicaon for the same product
for a dierent use or a second applicaon for a clinically superior version of the product for the same use. The FDA can
-
not, however, approve the same product made by another sponsor for the same indicaon during the market exclusivity
period unless it has the consent of the sponsor or the sponsor is unable to provide sucient quanes of the product.
Pediatric Studies and Exclusivity
Under the Pediatric Research Equity Act of 2003 (as amended,
PREA
), a BLA or supplement thereto must contain data that are adequate to assess the safety and eecveness of the product for the claimed indicaons in all relevant pediatric
sub-populaons, and to support dosing and administraon for each pediatric subpopulaon for which the product is safe
and eecve. Sponsors must also submit pediatric study plans prior to the assessment data. Those plans must contain an
outline of the proposed pediatric study or studies the applicant plans to conduct, including study objecves and design,
any deferral or waiver requests and other informaon required by regulaon. The applicant, the FDA, and the FDA’s inter
-
nal review commiee must then review the informaon submied, consult with each other and agree upon a nal plan.
The FDA or the applicant may request an amendment to the plan at any me.
The FDA may, on its own iniave or at the request of the applicant, grant deferrals for submission of some or all
pediatric data unl aer approval of the product for use in adults, or full or paral waivers from the pediatric data
requirements. Unless otherwise required by regulaon, PREA does not apply to a biologic for an indicaon for which
orphan designaon has been granted, except that PREA will apply to an original BLA for a new acve ingredient that is
orphan-designated if the biologic is a molecularly targeted cancer product intended for the treatment of an adult cancer
and is directed at a molecular target that FDA determines to be substanally relevant to the growth or progression of a
pediatric cancer.
Pediatric exclusivity is another type of non-patent markeng exclusivity in the U.S. and, if granted, provides for the at
-
tachment of an addional six months of markeng protecon to the term of any exisng regulatory exclusivity, including
the non-patent and orphan exclusivity. This six-month exclusivity may be granted if a BLA sponsor submits pediatric data
that fairly respond to a wrien request from the FDA for such data. The data do not need to show the product to be
eecve in the pediatric populaon studied; rather, if the clinical trial is deemed to fairly respond to the FDA’s request,
the addional protecon is granted. If reports of requested pediatric studies are submied to and accepted by the FDA
within the statutory me limits, whatever statutory or regulatory periods of exclusivity or patent protecon cover the
product are extended by six months. This is not a patent term extension, but it eecvely extends the regulatory period
during which the FDA cannot approve another applicaon.
Biosimilars and Exclusivity
The Biologics Price Compeon and Innovaon Act (
BPCIA
) established a regulatory scheme authorizing the FDA to ap-
prove biosimilars and interchangeable biosimilars.
Under the BPCIA, an applicant may submit an applicaon for licensure of a biologic product that is “biosimilar to” or “in
-
terchangeable with” a previously approved biological product or “reference product.” For the FDA to approve a biosimilar
product, it must nd that there are no clinically meaningful dierences between the reference product and proposed
biosimilar product in terms of safety, purity and potency. For the FDA to approve a biosimilar product as interchangeable
with a reference product, the agency must nd that the biosimilar product can be expected to produce the same clinical
results as the reference product, and (for products administered mulple mes) that the biologic and the reference bio
-
logic may be switched aer one has been previously administered without increasing safety risks or risks of diminished
ecacy relave to exclusive use of the reference biologic.
Under the BPCIA, an applicaon for a biosimilar product may not be submied to the FDA unl four years following the
date of approval of the reference product. The FDA may not approve a biosimilar product unl twelve years from the
date on which the reference product was approved. Even if a product is considered to be a reference product eligible
for exclusivity, another company could market a compeng version of that product if the FDA approves a full BLA for
such product containing the sponsor’s own nonclinical data and data from adequate and well-controlled clinical trials
to demonstrate the safety, purity and potency of their product. However, to rely on such exclusivies for establishing or
protecng our market posion is not without risk, as such laws are subject to changes by the legislature. The BPCIA also
created certain exclusivity periods for biosimilars approved as interchangeable products. At this juncture, it is unclear
whether products deemed “interchangeable” by the FDA will, in fact, be readily substuted by pharmacies, which are
governed by state pharmacy law.
U.S. Patent Term Restoraon
Depending upon the ming, duraon and specics of FDA approval of our product candidates, some of our U.S. patents
may be eligible for limited patent term extension under the Drug Price Compeon and Patent Term Restoraon Act of
1984 (the
Hatch-Waxman Amendments
). The Hatch-Waxman Amendments permit restoraon of the patent term of up
to ve years as compensaon for patent term lost during the FDA regulatory review process. Patent-term restoraon,
however, cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date
and only those claims covering such approved product, a method for using it or a method for manufacturing it may be
extended. The patent-term restoraon period is generally one-half the me between the eecve date of an IND and
the submission date of a BLA plus the me between the submission date of a BLA and the approval of that applicaon,
except that the review period is reduced by any me during which the applicant failed to exercise due diligence. Only
one patent applicable to an approved biologic is eligible for the extension and the applicaon for the extension must
be submied prior to the expiraon of the patent. The USPTO, in consultaon with the FDA, reviews and approves the
applicaon for any patent term extension or restoraon. In the future, we may apply for restoraon of patent term for
our currently owned or licensed patents to add patent life beyond its current expiraon date, depending on the expected
length of the clinical trials and other factors involved in the ling of the relevant BLA.
1.9.2 Regulation and Procedures Governing Approval of Medicinal Products in the
European Union and the United Kingdom
In order to market any medicinal product outside of the U.S., a company also must comply with numerous and varying reg
-
ulatory requirements of other countries and jurisdicons regarding quality, safety and ecacy and governing, among other
things, clinical trials, markeng authorizaon, commercial sales and distribuon of products. Whether or not it obtains FDA
approval for a product, an applicant will need to obtain the necessary approvals by the comparable regulatory authories
PART I
78 | Regulation Regulation | 79
before it can iniate clinical trials or markeng of the product in those countries or jurisdicons. Specically, the process
governing approval of medicinal products in the European Union and the United Kingdom generally follows the same lines
as in the U.S. It entails sasfactory compleon of pharmaceucal development, non-clinical studies and adequate and
well-controlled clinical trials to establish the safety and ecacy of the medicinal product for each proposed indicaon. It
also requires the submission to relevant competent authories for clinical trials authorizaon and to the EMA or to compe
-
tent authories in European Union member states for a MAA and granng of a markeng authorizaon by these authories
before the product can be marketed and sold in the European Union. Following the United Kingdom’s departure from the
European Union, a separate markeng authorizaon will be required in order to place medicinal products on the market in
the United Kingdom (under the Northern Ireland Protocol, the European Union regulatory framework will connue to apply
in Northern Ireland and centralized European Union authorizaons will connue to be recognized).
Clinical Trial Approval
In April 2014, the European Union adopted the new Clinical Trials Regulation (EU) No 536/2014, which replaced the
Clinical Trials Directive 2001/20/EC effective as of January 31, 2022. The transitory provisions of the new Regulation
offer sponsors the possibility to choose between the requirements of the previous Directive and the new Regu
-
lation if the request for authorization of a clinical trial is submitted in the year after the new Regulation became
applicable. If the sponsor chooses to submit under the previous Directive, the clinical trial continues to be governed
by the Directive until three years after the new Regulation became applicable. If a clinical trial continues for more
than three years after the Regulation became applicable, the new Regulation will at that time begin to apply to
the clinical trial. The new Regulation (EU), which is directly applicable in all European Union member states, aims
at simplifying and streamlining the approval of clinical trials in the European Union. The main characteristics of
the new Regulation include: a streamlined application procedure via a single-entry point through the Clinical Trials
Information System; a single set of documents to be prepared and submitted for the application as well as simplified
reporting procedures for clinical trial sponsors; and a harmonized procedure for the assessment of applications for
clinical trials, which is divided in two parts (Part I contains scientific and medicinal product documentation and Part
II contains the national and patient-level documentation). Part I is assessed by a coordinated review by the com
-
petent authorities of all European Union member states in which an application for authorization of a clinical trial
has been submitted (
Concerned Member States
) of a draft report prepared by a reference member state. Part II is assessed separately by each Concerned Member State. Strict deadlines have also been established for the assess
-
ment of clinical trial applications.
The United Kingdom has implemented Direcve 2001/20/EC into naonal law through the Medicines for Human Use
(Clinical Trials) Regulaons 2004 (as amended).The extent to which the regulaon of clinical trials in the United Kingdom
will mirror the new European Union Clinical Trials Regulaon that has come into eect is not yet known, however the
Medicines and Healthcare products Regulatory Agency (
MHRA
), the United Kingdom medicines regulator, has opened a consultaon on a set of proposals designed to improve and strengthen the United Kingdom clinical trials legislaon. Such
consultaon is open unl March 14, 2022.
Orphan Designaon and Exclusivity
Regulaon (EC) No. 141/2000 and Regulaon (EC) No. 847/2000 provide that a product can be designated as an orphan
drug by the European Commission if its sponsor can establish: (1) that the product is intended for the diagnosis, preven
-
on or treatment of a life-threatening or chronically debilitang condion, (2) either (i) the prevalence of the condion is
not more than ve in ten thousand persons in the European Union when the applicaon is made, or (ii) without incen
-
ves it is unlikely that the markeng of the product in the European Union would generate sucient return to jusfy the
necessary investment in its development and (3) there exists no sasfactory method of diagnosis, prevenon, or treat
-
ment of the condion in queson that has been authorized in the European Union or, if such method exists, the product
has to be of a signicant benet compared to products available for the condion.
An orphan designaon provides a number of benets, including fee reducons and, regulatory assistance. If a markeng
authorizaon is granted for an orphan medicinal product, this results in a ten-year period of market exclusivity. During
this market exclusivity period, neither the EMA nor the European Commission or the European Union member states can
accept an applicaon or grant a markeng authorizaon for a “similar medicinal product.” A “similar medicinal prod
-
uct” is dened as a medicinal product containing a similar acve substance or substances as contained in an authorized
orphan medicinal product, and which is intended for the same therapeuc indicaon. The market exclusivity period for
the authorized therapeuc indicaon may, however, be reduced to six years if, at the end of the h year, it is established
that the product no longer meets the criteria for orphan designaon because, for example, the product is suciently
protable not to jusfy market exclusivity. Market exclusivity may also be revoked in very select cases, such as if (i) it is
established that a similar medicinal product is safer, more eecve or otherwise clinically superior; (ii) the markeng
authorizaon holder for the authorized orphan product consents to the second orphan applicaon; or (iii) the markeng
authorizaon holder for the authorized orphan product cannot supply enough orphan medicinal product. Orphan desig
-
naon must be requested before subming an applicaon for markeng approval. Orphan designaon does not convey
any advantage in, or shorten the duraon of, the regulatory review and approval process.
Since January 1, 2021, a separate process for orphan designation has applied in Great Britain. There is now no
pre-marketing authorization orphan designation (as there is in the European Union) and the application for orphan
designation will be reviewed by the MHRA, at the time of an MAA for a United Kingdom or Great Britain marketing au
-
thorization. The criteria are the same as in the European Union, save that they apply to Great Britain only (e.g., there
must be no satisfactory method of diagnosis, prevention or treatment of the condition concerned in Great Britain, as
opposed to the European Union, and the prevalence of the condition must be no more than five in 10,000 persons in
Great Britain).
Markeng Authorizaon
To obtain a markeng authorizaon for a product under the European Union regulatory system, an applicant must submit
an MAA, either to the EMA using the centralized procedure or to competent authories in the European Union using the
other procedures (decentralized procedure, naonal procedure, or mutual recognion procedure). A markeng authori
-
zaon may be granted only to an applicant established in the European Union. Regulaon (EC) No. 1901/2006 provides
that prior to obtaining a markeng authorizaon in the European Union, an applicant must demonstrate compliance with
all measures included in an EMA-approved Pediatric Invesgaon Plan (
PIP
), covering all subsets of the pediatric popu-
laon, unless the EMA has granted a product-specic waiver, class waiver, or a deferral for one or more of the measures
included in the PIP.
The centralized procedure provides for the grant of a single markeng authorizaon by the European Commission that is
valid for all EEA Member States. Pursuant to Regulaon (EC) No. 726/2004, the centralized procedure is compulsory for
specic products, including for medicines produced by certain biotechnological processes, products designated as orphan
medicinal products, advanced therapy medicinal products (gene therapy, somac cell therapy or ssue engineered prod
-
ucts) and products with a new acve substance indicated for the treatment of certain diseases, including products for
the treatment of cancer and auto-immune diseases and other immune dysfuncons and neurodegenerave disorders.
The centralized procedure is oponal for products that contain a new acve substance for any other indicaons, which
are a signicant therapeuc, scienc or technical innovaon and whose authorizaon would be in the interest of public
health in the European Union.
Under the centralized procedure, the Commiee for Medicinal Products for Human Use (
CHMP
), established at the EMA is responsible for conducng the assessment of a product to dene its risk/benet prole. The CHMP recommendaon
is then sent to the European Commission, which adopts a decision binding in all EEA Member States. Under the central
-
ized procedure, the maximum meframe for the evaluaon of an MAA is 210 days, excluding clock stops when addional
informaon or wrien or oral explanaon is to be provided by the applicant in response to quesons asked by the CHMP.
Clock stops may extend the meframe of evaluaon of an MAA considerably beyond 210 days. Accelerated evaluaon
may be granted by the CHMP in exceponal cases, when a medicinal product is of major interest from the point of view
of public health and, in parcular, from the viewpoint of therapeuc innovaon. If the CHMP accepts such a request, the
me limit of 210 days will be reduced to 150 days (excluding clock stops), but it is possible that the CHMP may revert
to the standard me limit for the centralized procedure if it determines that it is no longer appropriate to conduct an
accelerated assessment. Since the United Kingdom has le the European Union, Great Britain will no longer be covered
by centralized markeng authorizaons (under the Northern Ireland Protocol, centralized European Union authorizaons
will connue to be recognized in Northern Ireland). All medicinal products with a current centralized authorizaon were
automacally converted to United Kingdom markeng authorizaons on 1 January 2021. For a period of two years from 1
January 2021, the MHRA may rely on a decision taken by the European Commission on the approval of a new markeng
authorizaon in the centralized procedure, in order to more quickly grant a new Great Britain markeng authorizaon. A
separate applicaon will, however, sll be required.
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80 | Regulation Regulation | 81
European Data and Market Exclusivity
In the European Union, innovave medicinal products, approved on the basis of a complete independent data package,
qualify for eight years of data exclusivity upon markeng authorizaon and an addional two years of market exclusivity.
The data exclusivity, if granted, prevents generic or biosimilar applicants from referencing the innovator’s preclinical and
clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar markeng
authorizaon in the European Union, for a period of eight years from the date on which the reference product was rst
authorized in the European Union. During the addional two-year period of market exclusivity a generic or biosimilar
MAA can be submied, and the innovator’s data may be referenced, but no generic or biosimilar product can be market
-
ed in the European Union unl the expiraon of the market exclusivity period. The overall ten year period will be extend
-
ed to a maximum of eleven years if, during the rst eight years of those ten years, the markeng authorizaon holder
obtains a markeng authorizaon for one or more new therapeuc indicaons which, during the scienc evaluaon
prior to their authorizaon, are determined to bring a signicant clinical benet in comparison with currently approved
therapies. There is no guarantee that a product will be considered by the EMA to be an innovave medicinal product,
and products may not qualify for data exclusivity. Even if a product is considered to be an innovave medicinal product
so that the innovator gains the prescribed period of data exclusivity, another company nevertheless could also market
another version of the product if such company obtained a markeng authorizaon based on an MAA with a complete
independent data package of pharmaceucal tests, preclinical tests and clinical trials.
Periods of Authorizaon and Renewals
A markeng authorizaon is valid for ve years, in principle, and it may be renewed aer ve years on the basis of a
reevaluaon of the risk benet balance by the EMA for a centrally authorized product, or by the competent authority of
the authorizing member state for a naonally authorized product. Once renewed, the markeng authorizaon is valid for
an unlimited period, unless the European Commission or the competent authority decides, on jused grounds relang
to pharmacovigilance, to proceed with one addional ve-year renewal period. Any authorizaon that is not followed by
the placement of the drug on the European Union market (in the case of the centralized procedure) or on the market of
the authorizing member state (for a naonally authorized product) within three years aer authorizaon, or if the drug is
removed from the market for three consecuve years, ceases to be valid.
Regulatory Requirements aer Markeng Authorizaon
Following approval, the holder of the markeng authorizaon is required to comply with a range of requirements applicable
to the manufacturing, markeng, promoon and sale of the medicinal product. These include compliance with the European
Union’s stringent pharmacovigilance or safety reporng rules, pursuant to which post-authorizaon studies and addional mon
-
itoring obligaons can be imposed. In addion, the manufacturing of authorized products, for which a separate manufacturer’s
license is mandatory, must also be conducted in strict compliance with the EMA’s GMP requirements and comparable require
-
ments of other regulatory bodies in the European Union, which mandate the methods, facilies and controls used in manufac
-
turing, processing and packing of products to assure their safety and identy. Finally, the markeng and promoon of autho
-
rized products, including industry-sponsored connuing medical educaon and adversing directed toward the prescribers of
products and/or the general public, are strictly regulated in the European Union under Direcve 2001/83/EC, as amended.
The aforemenoned European Union rules are generally applicable in the EEA.
Brexit and the Regulatory Framework in the United Kingdom
In June 2016, the electorate in the United Kingdom voted in favor of leaving the European Union (commonly referred to
as “Brexit”), and the United Kingdom ocially withdrew from the European Union on January 31, 2020. Pursuant to the
formal withdrawal arrangements agreed between the United Kingdom and the European Union, the United Kingdom was
subject to a transion period unl December 31, 2020, during which European Union rules connued to apply. However,
the European Union and the United Kingdom have concluded a trade and cooperaon agreement (
TCA
), which was pro-
visionally applicable since January 1, 2021 and has been formally applicable since May 1, 2021. The TCA includes specic
provisions concerning pharmaceucals, which include the mutual recognion of GMP, inspecons of manufacturing fa
-
cilies for medicinal products and GMP documents issued, but does not foresee wholesale mutual recognion of United
Kingdom and European Union pharmaceucal regulaons. At present, Great Britain has implemented European Union
legislaon on the markeng, promoon and sale of medicinal products through the Human Medicines Regulaons 2012
(as amended). The regulatory regime in Great Britain therefore largely aligns with current European Union regulaons,
however it is possible that these regimes will diverge in future now that Great Britain’s regulatory system is independent
from the European Union and the TCA does not provide for mutual recognion of United Kingdom and European Union
pharmaceucal legislaon. For example, the new Clinical Trials Regulaon which became eecve in the European Union
on January 31, 2022 has not been implemented into United Kingdom law, and a separate applicaon will need to be
submied for clinical trial authorizaon in the United Kingdom.
1.9.3 Regulation and Procedures Governing Approval of Medicinal Products in Japan
In order to market any medical products in Japan, a company must comply with numerous and varying regulatory re
-
quirements in Japan regarding quality, safety and ecacy in the context, among other things, of clinical trials, markeng
approval, commercial sales and distribuon of products. A person who manufactures or markets medical products in
Japan is subject to the supervision of the Minister of Health, Labour and Welfare (the
Minister
), primarily under the Act on Securing Quality, Ecacy and Safety of Pharmaceucals and Medical Devices (
Pharmaceucal and Medical Device
Act
). This entails the sasfactory compleon of pharmaceucal development, nonclinical studies and adequate and
well-controlled clinical trials to establish the safety and ecacy of the medical product for each proposed indicaon. It
also requires the ling of a nocaon of clinical trials with the PMDA and the obtaining of markeng approval from the
relevant authories before the product can be marketed and sold in the Japanese market.
Business License
Under the PMDA, a person is required to obtain from the Minister a markeng license in order to conduct the business of
markeng, leasing or providing medical products that are manufactured (or outsourced to a third party for manufactur
-
ing) or imported by such person.
Also, in order to conduct the business of manufacturing medical products which will be marketed in Japan, a person is
required to obtain from the Minister a manufacturing license for each manufacturing site.
Markeng Approval
Under the PMDA, it is generally required to obtain markeng approval from the Minister for the markeng of each
medical product. An applicaon for markeng approval must be made through the PMDA, which implements a markeng
approval review.
Clinical Trial
Under the PMDA, it is required to le nocaon of clinical trials with the PMDA. Also, the data of clinical trials and other
pernent data, which must be aached for an applicaon for markeng approval, must be obtained in compliance with
the standards established by the Minister, such as GLP and GCP spulated by the ministerial ordinances of the Minister.
Regulatory Requirements aer Markeng Approval
A markeng license-holder that has obtained markeng approval for a new medical product must have that medical
product re-examined by the Minister or by the PMDA for a specied period aer receiving markeng approval. The pur
-
pose of this re-examinaon process is to ensure the safety and ecacy of a newly approved medical product by imposing
on the markeng license-holder the obligaon to gather clinical data for a certain period aer the markeng approval
was granted so that the Minister has the opportunity to re-examine the product. Results of usage and other pernent
data must be aached for an applicaon for a re-examinaon. A markeng license holder that has obtained a markeng
approval is also required to invesgate, among other things, the results of usage and to periodically report to the Minis
-
ter pursuant to the PMDA.
Price Regulaon
In Japan, public medical insurance systems cover virtually the enre Japanese populaon. The public medical insurance
system, however, does not cover any medical product which is not listed on the NHI price list published by the Minister.
Accordingly, a markeng license-holder of medical products must rst have a new medical product listed on the NHI price
list in order to obtain its coverage under the public medical insurance system.
The NHI price of a medical product is determined either by price comparison of comparable medical products with neces
-
sary adjustments for innovaveness, usefulness or size of the market; or, in the absence of comparable medical products,
PART I
82 | Regulation Regulation | 83
by the cost calculaon method, determined aer considering of the opinion of the manufacturer. Prices on the NHI price
list will be subject to revision, generally once every year, on the basis of the actual prices at which the medical products
are purchased by medical instuons.
1.9.4 Coverage, Pricing and Reimbursement
Signicant uncertainty exists as to the coverage and reimbursement status of any product candidates for which we may
obtain regulatory approval. Even if our product candidates are approved for markeng, sales of such product candidates
will depend, in part, on the extent to which third-party payors, including government health programs in the U.S. (such
as Medicare and Medicaid), commercial health insurers, and managed care organizaons, provide coverage and establish
adequate reimbursement levels for such product candidates. Moreover, increasing eorts by governmental and third-par
-
ty payors in the European Union, the U.S. and other markets to cap or reduce healthcare costs may cause such organiza
-
ons to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not
cover or provide adequate payment for our product candidates. We expect to experience pricing pressures in connecon
with the sale of any of our product candidates due to the trend toward managed healthcare, the increasing inuence of
health maintenance organizaons and addional legislave changes. The downward pressure on healthcare costs in gen
-
eral, parcularly prescripon drugs and surgical procedures and other treatments, has become very intense. As a result,
increasingly high barriers are being erected to the entry of new products.
In the U.S. and markets in other countries, paents generally rely on third-party payors to reimburse all or part of the
costs associated with their treatment. Adequate coverage and reimbursement from governmental healthcare programs,
such as Medicare and Medicaid, and commercial payors is crical to new product acceptance. Paents are unlikely to use
any product candidates we may develop unless coverage is provided and reimbursement is adequate to cover a signi
-
cant poron of the cost of such product candidates.
Factors payors consider in determining reimbursement are based on whether the product is (i) a covered benet under
its health plan; (ii) safe, eecve and medically necessary; (iii) appropriate for the specic paent; (iv) cost-eecve; and
(v) neither experimental nor invesgaonal.
The Medicare and Medicaid programs increasingly are used as models for how private payors and other governmental
payors develop their coverage and reimbursement policies for drugs and biologics. Some third-party payors may require
pre-approval of coverage for new or innovave devices or drug therapies before they will reimburse health care pro
-
viders who use such therapies. It is dicult to predict at this me what third-party payors will decide with respect to
the coverage and reimbursement for our product candidates. The process for determining whether a payor will provide
coverage for a product may be separate from the process for seng the price or reimbursement rate that the payor will
pay for the product once coverage is approved. Third-party payors are increasingly challenging the price and examining
the medical necessity and cost-eecveness of medical products and services and imposing controls to manage costs,
especially drugs when an equivalent generic drug or a less expensive therapy is available. It is possible that a third-par
-
ty payor may consider our product candidate and other therapies as substutable and only oer to reimburse paents
for the less expensive product. Even if we show improved ecacy or improved convenience of administraon with our
product candidate, pricing of exisng drugs may limit the amount we will be able to charge for our product candidate.
These payors may deny or revoke the reimbursement status of a given drug product or establish prices for new or exisng
marketed products at levels that are too low to enable us to realize an appropriate return on our investment in product
development. If reimbursement is not available or is available only at limited levels, we may not be able to successfully
commercialize our product candidates and may not be able to obtain a sasfactory nancial return on products that we
may develop. Third-party payors may limit coverage to specic products on an approved list, also known as a formulary,
which might not include all of the approved products for a parcular indicaon.
In China, the newly created Naonal Healthcare Security Administraon (
NHSA
) an agency responsible for administering China’s social security system, organized a price negoaon with drug companies for certain new drugs that had not
been included in the Naonal Reimbursable Drug List (
NRDL
) at the me of the negoaon in November 2019, which resulted in an average price reducon by over 60% for 70 of the 119 drugs that passed the negoaon. NHSA, togeth
-
er with other government authories, review the inclusion or removal of drugs from China’s Naonal Drug Catalog for
Basic Medical Insurance, Work-related Injury Insurance and Maternity Insurance, or provincial or local medical insurance
catalogues for the naonal medical insurance program regularly, and the er under which a drug or device will be clas
-
sied, both of which aect the amounts reimbursable to program parcipants for their purchases of those drugs. These
determinaons are made based on a number of factors, including price and ecacy. We may also be invited to aend the
price negoaon with NHSA upon receiving regulatory approval in China, but we will likely need to signicantly reduce
our prices, and to negoate with each of the provincial healthcare security administraons on reimbursement raos. On
the other hand, if the NHSA or any of its local counterpart includes our drugs and devices in the NRDL or provincial RDL,
which may increase the demand for our drug candidates and devices, our potenal revenue from the sales of our drug
candidates and devices may sll decrease as a result of lower prices. Moreover, eligibility for reimbursement in China
does not imply that any drug or device will be paid for in all cases or at a rate that covers our costs, including licensing
fees, research, development, manufacture, sale and distribuon.
In order to secure coverage and reimbursement for any product that might be approved for sale, we have needed and
may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-ef
-
fecveness of the product, and the cost of these studies would be in addion to the costs required to obtain FDA or
other comparable markeng approvals. Even aer pharmacogenomic studies are conducted, product candidates may not
be considered medically necessary or cost-eecve. A decision by a third-party payor not to cover any product candi
-
dates we may develop could reduce physician ulizaon of such product candidates once approved and have a material
adverse eect on our sales, results of operaons and nancial condion. Addionally, a payor’s decision to provide cov
-
erage for a product does not imply that an adequate reimbursement rate will be approved. For example, the payor may
require co-payments that paents nd unacceptably high. Further, one payor’s determinaon to provide coverage for a
product does not assure that other payors will also provide coverage and reimbursement for the product, and the level
of coverage and reimbursement can dier signicantly from payor to payor. Third-party reimbursement and coverage
may not be adequate to enable us to maintain price levels sucient to realize an appropriate return on our investment in
product development. The insurance coverage and reimbursement status of newly approved products for orphan diseas
-
es is parcularly uncertain, and failure to obtain or maintain adequate coverage and reimbursement for any such product
candidates could limit our ability to generate revenue. Further, due to the COVID-19 pandemic, millions of individuals
have lost/will be losing employer-based insurance coverage, which may adversely aect our ability to commercialize our
products, As noted above, in the U.S., we plan to have various programs to help paents aord our products, including
paent assistance programs and co-pay coupon programs for eligible paents.
The containment of healthcare costs also has become a priority of U.S. federal, state and internaonal governments and
the prices of pharmaceucals have been a focus in this eort. Governments have shown signicant interest in imple
-
menng cost-containment programs, including price controls, restricons on reimbursement and requirements for subs
-
tuon of generic products. Net prices for drugs may be reduced by mandatory discounts or rebates required by govern
-
ment healthcare programs or private payors and by any future relaxaon of laws that presently restrict imports of drugs
from countries where they may be sold at lower prices than in the United States. Increasingly, third-party payors are
requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices
charged for medical products. We cannot be sure that reimbursement will be available for any future product candidate
that we commercialize and, if reimbursement is available, the level of reimbursement. In addion, many pharmaceucal
manufacturers must calculate and report certain price reporng metrics to the government, such as average sales price
(ASP) and best price. Penales may apply in some cases when such metrics are not submied accurately and mely.
Further, these prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare
programs. Adopon of price controls and cost-containment measures, and adopon of more restricve policies in juris
-
dicons with exisng controls and measures, could further limit our potenal revenue from the sale of any products for
which we may obtain approval. Coverage policies and third-party reimbursement rates may change at any me. Even if
favorable coverage and reimbursement status is aained for one or more of our products for which we or our collabora
-
tors receive markeng approval, less favorable coverage policies and reimbursement rates may be implemented in the
future. Obtaining and maintaining reimbursement status is me-consuming and costly.
No uniform policy for coverage and reimbursement for drug products exists among third-party payors in the U.S.
Therefore, coverage and reimbursement for drug products can dier signicantly from payor to payor. As a result, the
coverage determinaon process is oen a me-consuming and costly process that will require us to provide scienc
and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate
PART I
84 | Regulation Regulation | 85
reimbursement will be applied consistently or obtained in the rst instance. Furthermore, rules and regulaons regarding
reimbursement change frequently, in some cases at short noce, and we believe that changes in these rules and regula
-
ons are likely. Outside the U.S., we will face challenges in ensuring obtaining adequate coverage and payment for any
product candidates we may develop. Pricing of prescripon pharmaceucals is subject to governmental control in many
countries. Pricing negoaons with governmental authories can extend well beyond the receipt of regulatory market
-
ing approval for a product and may require us to conduct a clinical trial that compares the eecveness of any product
candidates we may develop to other available therapies to support cost-eecveness. The conduct of such a clinical trial
could be expensive, involve addional risk and result in delays in our commercializaon eorts.
In the European Union, pricing and reimbursement schemes vary widely from country to country. Some countries provide
that products may be marketed only aer a reimbursement price has been agreed. Some countries may require the com
-
pleon of addional studies that compare the cost-eecveness of a parcular product candidate to currently available
therapies (so called health technology assessments) in order to obtain reimbursement or pricing approval. For example,
the European Union provides opons for its member states to restrict the range of products for which their naonal
health insurance systems provide reimbursement and to control the prices of medicinal products for human use. Euro
-
pean Union member states may approve a specic price for a product or may instead adopt a system of direct or indirect
controls on the protability of the company placing the product on the market. Other member states allow companies to
x their own prices for products but monitor and control prescripon volumes and issue guidance to physicians to limit
prescripons. Recently, many countries in the European Union have increased the amount of discounts required on phar
-
maceucals and these eorts could connue as countries aempt to manage healthcare expenditures, especially in light
of the severe scal and debt crises experienced by many countries in the European Union. The downward pressure on
health care costs in general, parcularly prescripon products, has become intense. As a result, increasingly high barriers
are being erected to the entry of new products. Polical, economic and regulatory developments may further complicate
pricing negoaons, and pricing negoaons may connue aer reimbursement has been obtained. Reference pricing
used by various European Union Member States and parallel trade (arbitrage between low-priced and high-priced mem
-
ber states) can further reduce prices. Special pricing and reimbursement rules may apply to orphan drugs. Inclusion of
orphan drugs in reimbursement systems tend to focus on the medical usefulness, need, quality and economic benets to
paents and the healthcare system as for any drug. Acceptance of any medicinal product for reimbursement may come
with cost, use and oen volume restricons, which again can vary by country. In addion, results-based rules of reim
-
bursement may apply. There can be no assurance that any country that has price controls or reimbursement limitaons
for pharmaceucal products will allow favorable reimbursement and pricing arrangements for any of our products, if
approved in those countries. Historically, products launched in the European Union do not follow price structures of the
U.S. and generally prices tend to be signicantly lower.
Outside the U.S., internaonal operaons are generally subject to extensive governmental price controls and other
market regulaons, and we believe the increasing emphasis on cost-containment iniaves in Europe, Canada and other
countries has and will connue to put pressure on the pricing and usage of our product candidates. In many countries,
the prices of medical products are subject to varying price control mechanisms as part of naonal health systems. Other
countries allow companies to x their own prices for medical products but monitor and control company prots. Addi
-
onal foreign price controls or other changes in pricing regulaon could restrict the amount that we are able to charge
for our product candidates. Accordingly, in markets outside the U.S., the reimbursement for our products may be reduced
compared with the U.S. and may be insucient to generate commercially reasonable revenue and prots.
The delivery of healthcare in the European Union, including the establishment and operaon of health services and the
pricing and reimbursement of medicines, is almost exclusively a maer for naonal, rather than European Union, law
and policy. Naonal governments and health service providers have dierent priories and approaches to the delivery of
healthcare and the pricing and reimbursement of products in that context. In general, however, the healthcare budgetary
constraints in most European Union member states have resulted in restricons on the pricing and reimbursement of
medicines by relevant health service providers. Coupled with ever-increasing European Union and naonal regulatory
burdens on those wishing to develop and market products, this could prevent or delay markeng approval of our product
candidates, restrict or regulate post-approval acvies and aect our ability to commercialize any products for which we
obtain markeng approval.
86 | Regulation
PART I
Infinity
Our commitment to paents and
innovaon has no bounds
1.9.5 Healthcare Law and Regulation
Healthcare providers and third-party payors play a primary role in the recommendaon and prescripon of pharmaceu
-
cal products that are granted markeng approval. Our current and future arrangements with providers, researchers, con
-
sultants, third-party payors and customers are subject to broadly applicable federal and state fraud and abuse, an-kick
-
back, false claims, transparency and paent privacy laws and regulaons and other healthcare laws and regulaons that
may constrain our business and/or nancial arrangements. Restricons under applicable federal and state healthcare
laws and regulaons include, without limitaon, the following:
• the U.S. federal An-Kickback Statute (
AKS
) which prohibits, among other things, persons and enes from knowingly and willfully solicing, receiving, oering, or paying remuneraon, directly or indirectly, in cash or in kind, to induce or
reward either the referral of an individual for, or the purchase, order or recommendaon of, any good or service, for
which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid.
This statute has been interpreted to apply to arrangements between pharmaceucal manufacturers on the one hand
and prescribers, purchasers and formulary managers on the other. A person or enty can be found guilty of violang
the AKS without actual knowledge of the statute or specic intent to violate it. In addion, the government may assert
that a claim including items or services resulng from a violaon of the AKS constutes a false or fraudulent claim for
purposes of the federal False Claims Act or federal civil money penales statute. Violaons of the AKS carry potenally
signicant civil and criminal penales, including imprisonment, nes, administrave civil monetary penales, and ex
-
clusion from parcipaon in federal healthcare programs. On December 2, 2020, the Oce of Inspector General (OIG)
published further modicaons to the federal An-Kickback Statute. Under the nal rules, OIG added safe harbor pro
-
tecons under the An-Kickback Statute for certain coordinated care and value-based arrangements among clinicians,
providers, and others. This rule (with excepons) became eecve January 19, 2021. We connue to evaluate what
eect, if any, the rule will have on our business;
• the U.S. federal false claims and civil monetary penales laws, including the civil False Claims Act and federal civil mon
-
etary penalty laws, which, among other things, impose criminal and civil penales, including through civil whistleblow
-
er or qui tam acons, against individuals or enes for knowingly presenng, or causing to be presented, to the U.S.
federal government, claims for payment or approval that are false or fraudulent, knowingly making, using or causing
to be made or used, a false record or statement material to a false or fraudulent claim or obligaon to pay or trans
-
mit money to the federal government, or from knowingly making a false statement to avoid, decrease or conceal an
obligaon to pay money to the U.S. federal government. In addion, the government may assert that a claim including
items and services resulng from a violaon of the U.S. federal An-Kickback Statute constutes a false or fraudulent
claim for purposes of the False Claims Act. Manufacturers can be held liable under the False Claims Act even when they
do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudu
-
lent claims. The False Claims Act also permits a private individual acng as a “whistleblower” to bring qui tam acons
on behalf of the federal government alleging violaons of the False Claims Act and to share in any monetary recovery.
When an enty is determined to have violated the federal civil False Claims Act, the government may impose civil nes
and penales for each false claim, plus treble damages, and exclude the enty from parcipaon in Medicare, Medic
-
aid and other federal healthcare programs;
• the U.S. federal Health Insurance Portability and Accountability Act of 1996 (
HIPAA
) which imposes criminal and civil
liability for, among other things, knowingly and willfully execung, or aempng to execute, a scheme to defraud any
healthcare benet program, or obtaining by means of false or fraudulent pretenses, representaons, or promises, any
of the money or property owned by, or under the custody or control of, any healthcare benet program, regardless of
the pay (e.g., public or private) or knowingly and willfully falsifying, concealing or covering up a material fact or making
any materially false statement, in connecon with the delivery of, or payment for, healthcare benets, items or ser
-
vices relang to healthcare maers; similar to the U.S. federal An-Kickback Statute, a person or enty does not need
to have actual knowledge of the statute or specic intent to violate it in order to have commied a violaon;
• HIPAA, as amended by the Health Informaon Technology for Economic and Clinical Health Act of 2009 (
HITECH
) and its implemenng regulaons, and as amended again by the Omnibus Rule in 2013, which imposes certain obligaons,
including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individ
-
ually idenable health informaon without appropriate authorizaon by covered enes subject to the Final HIPAA
Omnibus Rule, i.e., certain covered health plans, healthcare clearinghouses and healthcare providers, as well as their
business associates, those independent contractors or agents of covered enes that perform certain services for or
on their behalf involving the use or disclosure of individually idenable health informaon. HITECH also created new
ers of civil monetary penales, amended HIPAA to make civil and criminal penales directly applicable to business
associates and possibly other persons, and gave state aorneys general new authority to le civil acons for damages
or injuncons in federal courts to enforce the federal HIPAA laws and seek aorneys’ fees and costs associated with
pursuing federal civil acons;
• the federal transparency requirements known as the federal Physician Payments Sunshine Act, under the Paent Pro
-
tecon and Aordable Care Act, as amended by the Health Care and Educaon Reconciliaon Act of 2010 (collecvely,
the
ACA
), which requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to the Centers for Medicare & Medicaid Services (
CMS
) within the U.S. Department of Health and Human Services, informaon related to payments and other transfers of value made by that enty to physicians (currently dened to
include doctors, densts, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and
investment interests held by physicians and their immediate family members. Failure to submit required informaon
may result in civil monetary penales for all payments, transfers of value or ownership or investment interests that
are not mely, accurately, and completely reported in an annual submission. Eecve January 1, 2022, these report
-
ing obligaons were extended to include transfers of value made to certain non-physician providers such as physician
assistants and nurse praconers;
• federal government price reporng laws, which require us to calculate and report complex pricing metrics in an accu
-
rate and mely manner to government programs;
• federal consumer protecon and unfair compeon laws, which broadly regulate marketplace acvies and acvies
that potenally harm consumers;
• analogous state laws and regulaons, including: state an-kickback and false claims laws, which may apply to our
business pracces, including, but not limited to, research, distribuon, sales and markeng arrangements and claims
involving healthcare items or services reimbursed by any third party payor, including commercial insurers; state laws
that require pharmaceucal companies to comply with the pharmaceucal industry’s voluntary compliance guidelines
and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments
that may be made to healthcare providers and other potenal referral sources; state and local laws that require the
licensure of sales representaves; state laws that require drug manufacturers to report informaon related to pay
-
ments and other transfers of value to physicians and other healthcare providers or markeng expenditures and pricing
informaon; state laws governing the privacy and security of health informaon in certain circumstances, many of
which dier from each other in signicant ways and may not have the same eect; and state laws related to insurance
fraud in the case of claims involving private insurers; and
• European and other foreign law equivalents of each of the laws, including reporng requirements detailing interacons
with and payments to healthcare providers and data privacy and security laws and regulaons that may be more strin
-
gent than those in the U.S.
Some state laws require pharmaceucal companies to comply with the April 2003 Oce of Inspector General Compliance
Program Guidance for Pharmaceucal Manufacturers and/or the Pharmaceucal Research and Manufacturers of Ameri
-
ca’s Code on Interacons with Healthcare Professionals, in addion to requiring pharmaceucal manufacturers to report
informaon related to payments to physicians and other health care providers or markeng expenditures. Several states
also impose other markeng restricons or require pharmaceucal companies to make markeng or price disclosures to
the state and require the registraon of pharmaceucal sales representaves State and foreign laws, including for example
the European Union General Data Protecon Regulaon, which became eecve May 2018, also govern the privacy and se
-
curity of health informaon in some circumstances, many of which dier from each other in signicant ways and oen are
not preempted by HIPAA, thus complicang compliance eorts. There are ambiguies as to what is required to comply with
these state requirements and if we fail to comply with an applicable state law requirement we could be subject to penales.
We will be required to spend substanal me and money to ensure that our business arrangements with third pares
comply with applicable healthcare laws and regulaons. Recent healthcare reform legislaon has strengthened these
federal and state healthcare laws. Because of the breadth of these laws and the narrowness of the statutory excepons
and safe harbors available, it is possible that some of our business acvies could be subject to challenge under one or
more of such laws.
Other laws that may aect our ability to operate include:
• the an-inducement law prohibits, among other things, the oering or giving of remuneraon, which includes, without
limitaon, any transfer of items or services for free or for less than fair market value (with limited excepons), to a
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88 | Regulation Regulation | 89
Medicare or Medicaid beneciary that the person know or should know is likely to inuence the beneciary’s selecon
of a parcular supplier of items or services reimbursable by a federal or state governmental program; and
• European and other foreign law equivalents of each of the laws, including reporng requirements detailing interacons
with and payments to healthcare providers.
In the U.S., to help paents aord our approved product, we may ulize programs to assist them, including paent
assistance programs and co-pay coupon programs for eligible paents. Government enforcement agencies have shown
increased interest in pharmaceucal companies’ product and paent assistance programs, including reimbursement
support services, and a number of invesgaons into these programs have resulted in signicant civil and criminal set
-
tlements. In addion, at least one insurer has directed its network pharmacies to no longer accept co-pay coupons for
certain specialty drugs the insurer idened. Our co-pay coupon programs could become the target of similar insurer
acons. In addion, in November 2013, the CMS issued guidance to the issuers of qualied health plans sold through
the ACA’s marketplaces encouraging such plans to reject paent cost-sharing support from third pares and indicang
that the CMS intends to monitor the provision of such support and may take regulatory acon to limit it in the future.
The CMS subsequently issued a rule requiring individual market qualied health plans to accept third-party premium
and cost-sharing payments from certain government-related enes. In September 2014, the OIG of the HHS issued a
Special Advisory Bullen warning manufacturers that they may be subject to sancons under the federal an-kickback
statute and/or civil monetary penalty laws if they do not take appropriate steps to exclude Part D beneciaries from
using co-pay coupons. Accordingly, companies exclude these Part D beneciaries from using co-pay coupons. It is possi
-
ble that changes in insurer policies regarding co-pay coupons and/or the introducon and enactment of new legislaon
or regulatory acon could restrict or otherwise negavely aect these paent support programs, which could result in
fewer paents using aected products, and therefore could have a material adverse eect on our sales, business, and
nancial condion.
Third party paent assistance programs that receive nancial support from companies have become the subject of
enhanced government and regulatory scruny. The OIG has established guidelines that suggest that it is lawful for phar
-
maceucal manufacturers to make donaons to charitable organizaons who provide co-pay assistance to Medicare
paents, provided that such organizaons, among other things, are bona de charies, are enrely independent of and
not controlled by the manufacturer, provide aid to applicants on a rst-come basis according to consistent nancial cri
-
teria and do not link aid to use of a donor’s product. However, donaons to paent assistance programs have received
some negave publicity and have been the subject of mulple government enforcement acons, related to allegaons
regarding their use to promote branded pharmaceucal products over other less costly alternaves. Specically, in
recent years, there have been mulple selements resulng out of government claims challenging the legality of their
paent assistance programs under a variety of federal and state laws. It is possible that we may make grants to indepen
-
dent charitable foundaons that help nancially needy paents with their premium, co-pay, and co-insurance obliga
-
ons. If we choose to do so, and if we or our vendors or donaon recipients are deemed to fail to comply with relevant
laws, regulaons or evolving government guidance in the operaon of these programs, we could be subject to damages,
nes, penales, or other criminal, civil, or administrave sancons or enforcement acons. We cannot ensure that our
compliance controls, policies, and procedures will be sucient to protect against acts of our employees, business part
-
ners, or vendors that may violate the laws or regulaons of the jurisdicons in which we operate. Regardless of whether
we have complied with the law, a government invesgaon could impact our business pracces, harm our reputaon,
divert the aenon of management, increase our expenses, and reduce the availability of foundaon support for our
paents who need assistance.
On December 2, 2020, the HHS published a regulaon removing safe harbor protecon for price reducons from phar
-
maceucal manufacturers to plan sponsors under Part D, either directly or through pharmacy benet managers (PBMs),
unless the price reducon is required by law. The rule also creates a new safe harbor for price reducons reected at the
point-of-sale, as well as a safe harbor for certain xed fee arrangements between PBMs and manufacturers. Implemen
-
taon of this change and new safe harbors for point-of-sale reducons in price for prescripon pharmaceucal products
and PBM service fees are currently under review by the current U.S. presidenal administraon and may be amended or
repealed. Further, on December 31, 2020, CMS published a new rule, eecve January 1, 2023, requiring manufacturers
to ensure the full value of co-pay assistance is passed on to the paent or these dollars will count toward the Average
Manufacturer Price and Best Price calculaon of the drug. On May 21, 2021, PhRMA sued the HHS in the U.S. District
Court for the District of Columbia, to stop the implementaon of the rule claiming that the rule contradicts federal law
surrounding Medicaid rebates. It is unclear how the outcome of this ligaon will aect the rule. We cannot predict how
the implementaon of and any further changes to this rule will aect our business. Although a number of these and oth
-
er proposed measures may require authorizaon through addional legislaon to become eecve, and the current U.S.
presidenal administraon may reverse or otherwise change these measures, both the current U.S. presidenal adminis
-
traon and Congress have indicated that they will connue to seek new legislave measures to control drug costs.
Violaons of these laws can subject us to criminal, civil and administrave sancons including monetary penales, dam
-
ages, nes, disgorgement, individual imprisonment and exclusion from parcipaon in government funded healthcare
programs, such as Medicare and Medicaid, addional reporng requirements and oversight if we become subject to a
corporate integrity agreement or similar agreement to resolve allegaons of non-compliance with these laws, reputaonal
harm, and we may be required to curtail or restructure our operaons. Moreover, we expect that there will connue to be
federal and state laws and regulaons, proposed and implemented, that could impact our future operaons and business.
Because of the breadth of these laws and the narrowness of the statutory excepons and safe harbors available, it is pos
-
sible that some of our business acvies could be subject to challenge under one or more of such laws. Ensuring that our
internal operaons and future business arrangements with third pares comply with applicable healthcare laws and reg
-
ulaons will involve substanal costs. It is possible that governmental authories will conclude that our business pracc
-
es do not comply with current or future statutes, regulaons, agency guidance or case law involving applicable fraud and
abuse or other healthcare laws and regulaons. If our operaons are found to be in violaon of any of the laws described
above or any other governmental laws and regulaons that may apply to us, we may be subject to signicant penales,
including administrave, civil and criminal penales, damages, nes, disgorgement, the exclusion from parcipaon in
federal and state healthcare programs, individual imprisonment, reputaonal harm, and the curtailment or restructuring
of our operaons, as well as addional reporng obligaons and oversight if we become subject to a corporate integrity
agreement or other agreement to resolve allegaons of non-compliance with these laws. Further, defending against any
such acons can be costly and me consuming, and may require signicant nancial and personnel resources. Therefore,
even if we are successful in defending against any such acons that may be brought against us, our business may be
impaired. If any of the physicians or other providers or enes with whom we expect to do business are found to not be
in compliance with applicable laws, they may be subject to criminal, civil or administrave sancons, including exclusions
from government funded healthcare programs and imprisonment. If any of the above occur, our ability to operate our
business and our results of operaons could be adversely aected.
1.9.6 Healthcare Reform
In the U.S., the European Union and other foreign jurisdicons, there have been a number of legislave and regulato
-
ry changes to the healthcare system that could aect our future results of operaons. In parcular, there have been
and connue to be a number of iniaves at the U.S. federal and state levels that seek to reduce healthcare costs and
improve the quality of healthcare. For example, in March 2010, the ACA entered into force. The ACA is a sweeping law in
-
tended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies
against fraud and abuse, add new transparency requirements for the healthcare and health insurance industries, impose
new taxes and fees on the health industry and impose addional health policy reforms.
Among the provisions of the ACA of importance to our potenal product candidates are the following:
• an annual, nondeducble fee on any enty that manufacturers or imports specied branded prescripon drugs and
biologic products, apporoned among these enes according to their market share in certain government healthcare
programs, although this fee would not apply to sales of certain products approved exclusively for orphan indicaons;
• expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to oer Medicaid cover
-
age to certain individuals with income at or below 133% of the federal poverty level, thereby potenally increasing a
manufacturer’s Medicaid rebate liability;
• expansion of manufacturers’ rebate liability under the Medicaid Drug Rebate Program by increasing the minimum
rebate for both branded and generic drugs and revising the denion of “average manufacturer price,” or AMP, for
calculang and reporng Medicaid drug rebates on outpaent prescripon drug prices and extending rebate liability to
prescripons for individuals enrolled in Medicare Advantage plans;
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• a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated
for products that are inhaled, infused, inslled, implanted or injected;
• expanding the types of enes eligible for the 340B drug discount program;
• establishing the Medicare Part D coverage gap discount program, which requires manufacturers to provide a 50% (in
-
creased to 70% eecve January 1, 2019 pursuant to subsequent legislaon) point-of-sale-discount o the negoated
price of applicable products to eligible beneciaries during their coverage gap period as a condion for the manufac
-
turers’ outpaent products to be covered under Medicare Part D;
• a new Paent-Centered Outcomes Research Instute to oversee, idenfy priories in and conduct comparave clinical
eecveness research, along with funding for such research; and
• establishment of the Center for Medicare and Medicaid Innovaon (
CMMI
) within CMS, to test innovave payment and service delivery models to lower Medicare and Medicaid spending, potenally including prescripon product spending.
Since its enactment, some of the provisions of the ACA have yet to be fully implemented, while certain provisions have
been subject to judicial, congressional, and execuve challenges. As a result, there have been delays in the implementa
-
on of, and acon taken to repeal or replace, certain aspects of the ACA.
Since its enactment, there have been judicial, Congressional and execuve challenges to certain aspects of the ACA. On
June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states
without specically ruling on the constuonality of the ACA. Prior to the Supreme Court’s decision, President Biden
issued an execuve order to iniate a special enrollment period from February 15, 2021 through August 15, 2021 for pur
-
poses of obtaining health insurance coverage through the ACA marketplace. The execuve order also instructed certain
governmental agencies to review and reconsider their exisng policies and rules that limit access to healthcare, including
among others, reexamining Medicaid demonstraon projects and waiver programs that include work requirements, and
policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.
It is unclear how other healthcare reform measures of the Biden administraon or other eorts, if any, to challenge,
repeal or replace the ACA will impact our business.
Prior to the Biden administraon, on October 13, 2017, former President Trump signed an execuve order terminang
the cost-sharing subsidies, or CSRs, that reimburse insurers under the ACA. Several state Aorneys General led suit to
stop the administraon from terminang the subsidies, but their request for a restraining order was denied by a federal
judge in California on October 25, 2017. On August 14, 2020, the Court of Appeals for the Federal Circuit armed a lower
court ruling that the federal government is liable to insurers selling marketplace health plans for the loss of cost-sharing
reducon reimbursements mandated under the ACA. It is unclear what impact this will have on our business. Further, on
June 14, 2018, the U.S. Court of Appeals for the Federal Circuit ruled that the federal government was not required to
pay more than $12 billion in ACA risk corridor payments to third-party payors who argued were owed to them. On April
27, 2020, the U.S. Supreme Court reversed the Federal Circuit decision and remanded the case to the U.S. Court of Feder
-
al Claims, concluding the government has an obligaon to pay these risk corridor payments under the relevant formula. It
is unclear what eect this will have on our business.
In addion, CMS published a nal rule that would give states greater exibility as of 2020 in seng benchmarks for in
-
surers in the individual and small group marketplaces, which may have the eect of relaxing the essenal health benets
required under the ACA for plans sold through such marketplaces.
On December 20, 2019, former President Trump signed into law the Further Consolidated Appropriaons Act (H.R. 1865),
which repeals the Cadillac tax, the health insurance provider tax, and the medical device excise tax. It is impossible to
determine whether similar taxes could be instated in the future.
In addion, other legislave changes have been proposed and adopted since the ACA was enacted. These new laws may
result in addional reducons in Medicare and other healthcare funding. For example, on August 2, 2011, the Budget
Control Act of 2011, among other things, included aggregate reducons of Medicare payments to providers of 2% per
nancial year. These reducons went into eect on April 1, 2013 and, due to subsequent legislave amendments to the
statute, including without limitaon the Biparsan Budget Act of 2015, will remain in eect through 2030, with the ex
-
cepon of a temporary suspension from May 1, 2020 through March 31, 2022 due to the COVID-19 pandemic. Following
the suspension, a 1% payment reducon will occur beginning April 1, 2022 through June 30, 2022, and the 2% payment
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reducon will resume on July 1, 2022. Proposed legislaon, if passed, would extend this suspension unl the end of the
pandemic. On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things,
further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treat
-
ment centers, and increased the statute of limitaons period for the government to recover overpayments to providers
from three to ve years. These new laws may result in addional reducons in Medicare and other health care funding,
which could have a material adverse eect on our customers and accordingly, our nancial operaons.
On May 23, 2019, CMS issued a nal rule to allow Medicare Advantage Plans the opon of using step therapy for Part B
drugs beginning January 1, 2020. This nal rule codied CMS’s policy change that was eecve January 1, 2019. However,
it is unclear whether the Biden administraon will challenge, reverse, revoke or otherwise modify these execuve and
administrave acons aer January 20, 2021.
Recently there has been other types of heightened governmental scruny over the manner in which manufacturers set
prices for their marketed products. Specically, there have been several recent U.S. Congressional inquiries and proposed
bills designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescripon drugs
under Medicare, review the relaonship between pricing and manufacturer paent programs and reform government
program reimbursement methodologies for drugs.
At a federal level, President Biden signed an Execuve Order on July 9, 2021 arming the administraon’s policy to (i)
support legislave reforms that would lower the prices of prescripon drug and biologics, including by allowing Medicare
to negoate drug prices, by imposing inaon caps, and, by supporng the development and market entry of lower-cost
generic drugs and biosimilars; and (ii) support the enactment of a public health insurance opon. Among other things,
the Execuve Order also directs HHS to provide a report on acons to combat excessive pricing of prescripon drugs,
enhance the domesc drug supply chain, reduce the price that the Federal government pays for drugs, and address price
gouging in the industry; and directs the FDA to work with states and Indian Tribes that propose to develop secon 804
Importaon Programs in accordance with the Medicare Prescripon Drug, Improvement, and Modernizaon Act of 2003,
and the FDA’s implemenng regulaons. FDA released such implemenng regulaons on September 24, 2020, which
went into eect on November 30, 2020, providing guidance for states to build and submit importaon plans for drugs
from Canada. On September 25, 2020, CMS stated drugs imported by states under this rule will not be eligible for federal
rebates under Secon 1927 of the Social Security Act and manufacturers would not report these drugs for “best price” or
Average Manufacturer Price purposes. Since these drugs are not considered covered outpaent drugs, CMS further stat
-
ed it will not publish a Naonal Average Drug Acquision Cost for these drugs. If implemented, importaon of drugs from
Canada may materially and adversely aect the price we receive for any of our product candidates. Further, on November
20, 2020 CMS issued an Interim Final Rule implemenng the Most Favored Naon (MFN) Model under which Medicare
Part B reimbursement rates would have been calculated for certain drugs and biologicals based on the lowest price
drug manufacturers receive in Organizaon for Economic Cooperaon and Development countries with a similar gross
domesc product per capita. However, on December 29, 2021 CMS rescinded the MFN rule. Addionally, on November
30, 2020, HHS published a regulaon removing safe harbor protecon for price reducons from pharmaceucal manu
-
facturers to plan sponsors under Part D, either directly or through pharmacy benet managers, unless the price reducon
is required by law. The rule also creates a new safe harbor for price reducons reected at the point-of-sale, as well as
a safe harbor for certain xed fee arrangements between pharmacy benet managers and manufacturers. Pursuant to
court order, the removal and addion of the aforemenoned safe harbors were delayed and recent legislaon imposed
a moratorium on implementaon of the rule unl January 1, 2026. Although a number of these and other proposed
measures may require authorizaon through addional legislaon to become eecve, and the Biden administraon may
reverse or otherwise change these measures, both the Biden administraon and Congress have indicated that they will
connue to seek new legislave measures to control drug costs.
We expect that addional U.S. federal healthcare reform measures will be adopted in the future, any of which could
limit the amounts that the U.S. federal government will pay for healthcare products and services, which could result in
reduced demand for our product candidates or addional pricing pressures.
Further, legislave and regulatory proposals have been made to expand post-approval requirements and restrict sales
and promoonal acvies for pharmaceucal products. We cannot be sure whether addional legislave changes will be
enacted, or whether FDA regulaons, guidance or interpretaons will be changed, or what the impact of such changes on
94 | Regulation94 | Regulation
the markeng approvals, if any, of our product candidates, may be. In addion, increased scruny by the U.S. Congress of
the FDA’s approval process may signicantly delay or prevent markeng approval, as well as subject us to more stringent
product labeling and post-markeng condions and other requirements.
Individual states in the U.S. have also become increasingly aggressive in passing legislaon and implemenng regulaons
designed to control pharmaceucal and biological product pricing, including price or paent reimbursement constraints,
discounts, restricons on certain product access and markeng cost disclosure and transparency measures, and, in some
cases, designed to encourage importaon from other countries and bulk purchasing. Legally mandated price controls
on payment amounts by third-party payors or other restricons could harm our business, results of operaons, nan
-
cial condion and prospects. In addion, regional healthcare authories and individual hospitals are increasingly using
bidding procedures to determine what pharmaceucal products and which suppliers will be included in their prescripon
drug and other healthcare programs. This could reduce the ulmate demand for our products or put pressure on our
product pricing, which could negavely aect our business, results of operaons, nancial condion and prospects.
In the European Union, similar polical, economic and regulatory developments may aect our ability to protably com
-
mercialize our current or any future products. In addion to connuing pressure on prices and cost containment mea
-
sures, legislave developments at the European Union or member state level may result in signicant addional require
-
ments or obstacles that may increase our operang costs. The delivery of healthcare in the European Union, including
the establishment and operaon of health services and the pricing and reimbursement of medicines, is almost exclusively
a maer for naonal, rather than European Union, law and policy. Naonal governments and health service providers
have dierent priories and approaches to the delivery of health care and the pricing and reimbursement of products
in that context. In general, however, the healthcare budgetary constraints in most European Union member states have
resulted in restricons on the pricing and reimbursement of medicines by relevant health service providers. Coupled
with ever-increasing European Union and naonal regulatory burdens on those wishing to develop and market products,
this could prevent or delay markeng approval of our product candidates, restrict or regulate post-approval acvies
and aect our ability to commercialize any products for which we obtain markeng approval. In internaonal markets,
reimbursement and healthcare payment systems vary signicantly by country, and many countries have instuted price
ceilings on specic products and therapies.
We cannot predict the likelihood, nature or extent of government regulaon that may arise from future legislaon or
administrave acon, either in the U.S. or abroad. If we or our collaborators are slow or unable to adapt to changes in
exisng requirements or the adopon of new requirements or policies, or if we or our collaborators are not able to main
-
tain regulatory compliance, our product candidates may lose any regulatory approval that may have been obtained and
we may not achieve or sustain protability, which would adversely aect our business.
1.9.7 Environmental issues which may influence the use of our material fixed assets
Our primary research and development acvies take place in our facilies in Zwijnaarde, Belgium. For these acvies
we require, and have obtained, the necessary environmental and biohazard permits from the responsible governments,
required by us for the manner in which we use said facilies
2
Contents
2.1 Risk Factors Related to argenx’s Financial Posion and 98
2.2 Risk Factors Related to the Development and Clinical Tesng 100
2.3 Risk Factors Related to Commercializaon of argenx’s 108
2.4 Risk Factors Related to argenx’s Business and Industry 114
2.5 Risk Factors Related to argenx’s Dependence on Third Pares 119
2.6 Risk Factors Related to argenx’s Intellectual Property 124
2.7 Risk Factors Related to argenx’s Organizaon and Operaons 133
PART II
Risk
Factors
2 Risk Factors
The occurrence of any of the events or circumstances described in these risk factors, individually or together with
other circumstances, could have a material adverse eect on the business, results of operaons, nancial condion and pros
-
pects of argenx. These are not the only risks argenx faces. Addional risks and uncertaines not presently known to argenx or
that it currently considers immaterial or not specic may also impair its business, results of operaon and nancial condion.
2.1 Risk Factors Related to argenx’s
Financial Position and Need for
Additional Capital
2.1.1 We have incurred significant losses since our inception and expect
to incur losses for the foreseeable future. We may never achieve or
maintain profitability.
We are a commercial-stage biopharmaceutical company with a limited operating history and we have only very
recently commenced our transition from clinical-stage to a commercial-stage company. Only VYVGART™ (efgartigi
-
mod alfa fcab) for the treatment of gMG has obtained regulatory approval in the U.S. on December 17, 2021 and
in Japan on January 20, 2022 and we do not currently have any approvals in any other jurisdictions or for any other
product candidates. Since our inception, we have incurred significant operating losses, totaling USD 1,400.2 million
of cumulative losses. Our losses resulted principally from costs incurred in research and development, preclinical
testing, clinical development of our product and our product candidates as well as costs incurred for research
programs, pre-commercial activities and from general and administrative costs associated with our operations.
In addition, we expect to continue to incur significant costs associated with our listings in the U.S. and in Europe.
In the future, we intend to continue to conduct research and development, preclinical testing, clinical trials and
regulatory compliance activities as well as the commercialization of VYVGART™ for the treatment of gMG in the
U.S. and in Japan and we intend to continue our efforts to establish and maintain a sales, marketing and distribu
-
tion infrastructure. These expenses, together with anticipated general and administrative expenses, will result in
incurring further significant losses for at least the next several years. We anticipate that our expenses will increase
substantially if and as we execute our strategic objectives and as we experience delays or encounter issues relating
thereto, including failed studies, ambiguous trial results, safety issues or other regulatory challenges. If our losses
become greater than expected, we may require additional financing than anticipated and such financing may not
be available to us on acceptable terms or at all.
To become and remain profitable, we must succeed in developing and eventually commercializing products that
generate significant revenue. This will require us to be successful in a range of challenging activities, including com
-
pleting preclinical testing and clinical trials of our product and our product candidates, discovering and developing
additional product candidates, obtaining regulatory approval for any product candidates that successfully complete
clinical trials, establishing manufacturing and marketing capabilities and ultimately selling any products for which
we may obtain regulatory approval. We may never succeed in these activities and, even if we do, may never gener
-
ate revenue that is significant enough to achieve profitability. For instance, even though we have received approval
of and commercialize VYVGART™ for the treatment of gMG in the U.S. and in Japan, we can provide no assurances
that we will be able to achieve profitability based on sales in that indication alone or that we will be able to receive
approval of and commercialize VYVGART™ in other indications or in other countries.
Even if we do generate product royales or product sales, we may never achieve or sustain protability on a quarterly or
annual basis. Our failure to achieve or sustain protability could impair our ability to raise capital, expand our business,
diversify our product oerings or connue our operaons and as such could have a material adverse impact on our busi
-
ness, nancial condion and results of operaons.
2.1.2 Substantial additional funding may be required in order to complete the
development and commercialization of our products and product candidates,
but may not be available to us on acceptable terms or at all.
Notwithstanding our signicant posion of cash and cash equivalents of USD 1,334.7 million and other current nancial
assets of USD 1,002.0 million as of December 31, 2021, as disclosed in our consolidated nancial statements for the
nancial year ended December 31, 2021, we expect to require addional funding in the future to suciently nance our
operaons, to advance development of our products and product candidates and to connue our business acvies re
-
lang to research and development and the commercializaon of our products. Our future capital requirements for VYV
-
GART™ and our current or any future product candidates will depend on many factors, including (i) the progress, ming
and compleon of preclinical tesng and clinical trials for our current or any future product candidates, (ii) the number
of potenal new product candidates we idenfy and decide to develop, (iii) the me and costs involved in obtaining reg
-
ulatory approval for our product candidates and any delays we may encounter as a result of evolving regulatory require
-
ments or adverse results with respect to any of our product candidates, (iv) selling and markeng acvies undertaken
in connecon with the potenal commercializaon of our current products or product candidates or any future product
candidates, if approved, and costs involved in the creaon of an eecve sales and markeng organizaon, (v) manufac
-
turing acvies undertaken ahead of the potenal commercializaon of our current products or product candidates or
any future product candidates, if approved, and costs involved in the creaon of an eecve supply chain, (vi) the costs
involved in growing our organizaon to the size needed to allow for the research, development and potenal commer
-
cializaon of our current products or product candidates or any future product candidates, (vii) the costs involved in ling
patent applicaons and maintaining and enforcing patents or defending against claims or infringements raised by third
pares, (viii) the maintenance of our exisng collaboraon agreements and entry into new collaboraon agreements, (ix)
the amount of revenues, if any, we may derive either directly or in the form of royalty payments from future sales of our
current products or product candidates or any future product candidates, if approved, and (x) developments related to
COVID-19 and its impact on the costs and ming associated with the conduct of our clinical trials, preclinical programs,
manufacturing acvies and other related acvies.
In preparaon of our commercial launch of VYVGART™, our cash burn increased signicantly in 2021 as compared to
2020 and previous nancial years. As disclosed in our consolidated nancial statements for the nancial year ended
December 31, 2021, net cash oulow from our operang acvies increased by $208.3 million to a net oulow of $606.8
million for the year ended December 31, 2021, compared to a net oulow of $398.5 million for the year ended December
31, 2020. As disclosed in our previous consolidated nancial statements, our cash ows from our operang acvies
amounted to a net inow from of $151.3 million (€134.6 million) for the year ended December 31, 2019, a net oulow of
$63.5 million (€53.8 million) for the year ended December 31, 2018 and a net oulow of $41.1 million (€36.5 million) for
the year ended December 31, 2017. Based on our current plans to expand our commercial infrastructure and dierenat
-
ed pipeline of assets, we expect our cash burn to connue to signicantly increase in 2022. The increased spend will
support our transion to an integrated immunology company and is, in parcular, expected to be used to build our
commercial infrastructure to support the commercializaon of VYVGART™ in the U.S. and in Japan for the treatment of
gMG and, if approved, for a rapidly growing number of indicaons in the U.S. and Japan and our other key territories (in
the EU), to advance the development of efgargimod to market regulatory approval for the treatment of ITP, PV, CIDP, BP,
myosis, COVID-19 mediated POTS, SjS, MN and LN, to advance clinical development of ARGX-117 in mulple Phase 2
proof of concept trials in MMN and DGF in the context of kidney transplant, to advance ARGX-119 and early stage
pipeline candidates in our commercial franchises, the neuromuscular, hematology, dermatology and nephrology franchis
-
es, to build out a commercial supply chain to support our global launches of any approved products, to expand our
pipeline of future product candidates through the IIP, and to fund other current and future research and development
acvies and technology development and for working capital and other general corporate purposes.
98 | Risk Factors Related to argenx’s Financial Position and Need for Additional Capital Risk Factors Related to argenx’s Financial Position and Need for Additional Capital | 99
PART II
Any failure by us to keep the cash burn under control by applying our funds eecvely and managing our cash and invest
-
ments appropriately could result in nancial losses that could have a material adverse eect on our business.
Unl such me as we can generate signicant revenue from product sales, if ever, we expect to nance our operaons
through a combinaon of public or private equity or debt nancings or other sources, which may include collaboraons
with third pares. Our ability to raise addional funds will depend on nancial, economic and market condions and other
factors, over which we may have no or limited control. Adequate addional nancing may not be available to us on accept
-
able terms, or at all. The inability for us to raise capital as and when needed would have a negave impact on our nancial
condion and our ability to pursue our business strategy and as a result we may be forced to delay, reduce or terminate
the development or commercializaon of all or part of our research programs or products or product candidates, we may
be required to signicantly curtail, delay or disconnue one or more of our research or development programs or the com
-
mercializaon of any of our products or product candidates, or be unable to expand our operaons or otherwise capitalize
on our business opportunies, as desired or we may be unable to take advantage of future business opportunies, all of
which may have a material adverse impact on our business, nancial condion and results of operaons.
2.1.3 The investment of our cash and cash equivalents may be subject to risks
which may cause losses and aect the liquidity of these investments.
As of December 31, 2021, we had cash and cash equivalents and current nancial assets of USD 2,336.7 million. We
historically have invested substanally all of our available cash and cash equivalents and current nancial assets in
either current accounts, savings accounts, term accounts or highly liquid money market funds, pending their use in our
business. Any future investments may include term deposits, corporate bonds, commercial paper, cercate of deposit,
government securies and money market funds in accordance with our cash management policy. These investments may
be subject to general credit, liquidity, and market and interest rate risks. For example, we may realize losses in the fair
value of these investments or a complete loss of these investments, which would have a negave eect on our nancial
condion. In addion, should our investments cease paying or reduce the amount of interest paid to us, our interest
income would suer. The market risks associated with our investment porolio may have an adverse eect on our results
of operaons, liquidity and nancial condion.
2.2 Risk Factors Related to the
Development and Clinical Testing
of argenx’s Products and Product
Candidates
2.2.1 All but one of our products and product candidates are either in preclinical,
early-stage clinical or clinical development or market approval has been
requested for them, but has not (yet) been granted, and only VYVGART™ for
the treatment of gMG has obtained regulatory approval in the U.S. and in Japan.
Our trials may fail and even if they succeed we may be unable to commercialize
any or all of our products and product candidates due to a lack of, or delay in,
regulatory approval or for other reasons.
For our clinical trials to succeed and in order to obtain the requisite regulatory approvals to market and sell any of our
products and product candidates, we or our collaborators for such candidates must successfully demonstrate through
extensive preclinical studies and clinical trials that our products are safe, pure and potent or eecve in humans. Clinical
tesng is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at
any me during the clinical trial process and our future clinical trial results may not be successful. There is a high failure
rate for drugs and biologics proceeding through clinical trials. A number of companies in the pharmaceucal and bio
-
technology industries have suered signicant setbacks in clinical development even aer achieving promising results in
earlier studies, and any such setbacks in our clinical development could have a material adverse eect on our business,
operang results and nancial condion.
We may experience delays in our ongoing clinical trials, including as a result of COVID-19, and we do not know whether
planned clinical trials will begin on me, need to be redesigned, enroll paents on me or be completed on schedule, if
at all. Clinical trials can be delayed, suspended, or terminated for a large variety of reasons outside our control, includ
-
ing delays of approval from regulatory authories, instuonal review boards or ethics commiees, delays or failure to
recruit or retain paents, failures of third pares to comply with regulatory or contractual requirements or issues relang
to the quanty, quality or stability of the product or product candidate.
We could encounter delays, for example if a clinical trial is suspended or terminated by us, by the instuonal review
boards (
IRBs
) of the instuons in which such trials are being conducted or ethics commiees, by the Data Review Commiee (
DRC
) or Data Safety Monitoring Board (DSMB
) for such trial or by the EMA, FDA, PMDA or other regulatory authories. Such authories may impose a suspension or terminaon due to a number of factors, including failure to
conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspecon of the clini
-
cal trial operaons or trial site by the EMA, FDA, PMDA or other regulatory authories resulng in the imposion of a
clinical hold, unforeseen safety issues or adverse side eects, including those relang to the class to which our products
and product candidates belong, failure to demonstrate a benet from using products or product candidate, changes in
governmental regulaons or administrave acons or lack of adequate funding to connue the clinical trial. We could
also experience operaonal challenges as we undertake an increasing number of clinical trials. If we experience delays in
the compleon of, or terminaon of, any clinical trial of our products or product candidates, the commercial prospects
of our products and product candidates will be harmed, and our ability to generate product revenues from any of these
products and product candidates will be delayed. In addion, any delays in compleng our clinical trials will increase
our costs, slow down our product candidate development and approval process and jeopardize our ability to commence
product sales and generate revenues. Signicant clinical trial delays could also allow our competors to bring products
to market before we do or shorten any periods during which we have the exclusive right to commercialize our products
and product candidates and impair our ability to commercialize our products and product candidates and may harm our
business, results of operaons and nancial condion.
Clinical trials must be conducted in accordance with the EMA, FDA, PMDA and other applicable regulatory authories’
legal requirements and regulaons and are subject to oversight by these governmental agencies and IRBs at the medical ins
-
tuons where the clinical trials are conducted or ethics commiees. In addion, clinical trials must be conducted with supplies
of our products and product candidates produced under cGMP requirements and other regulaons. Furthermore, we rely on
contract research organizaons (
CROs
) and clinical trial sites to ensure the proper and mely conduct of our clinical trials and while we have agreements governing their commied acvies, we have limited inuence over their actual performance.
We depend on our collaborators and on medical instuons and CROs to conduct our clinical trials in compliance with GCP
requirements. To the extent our collaborators or the CROs or invesgators fail to enroll parcipants for our clinical trials, fail
to conduct the study to GCP standards or are delayed for a signicant me in the execuon of trials, including achieving full
enrollment, we may be aected by increased costs, program delays or both, which may harm our business. In addion, clinical
trials that are conducted in countries outside the European Union and the U.S. may subject us to further delays and expenses
as a result of increased shipment costs, addional regulatory requirements and the engagement of non-European Union and
non-U.S. CROs, as well as expose us to risks associated with clinical invesgators who are unknown to the EMA, FDA, PMDA or
other regulatory authories, and apply dierent standards of diagnosis, screening and medical care.
Before we can commence clinical trials for a product candidate, we must complete extensive preclinical tesng and studies
that support our planned IND applicaons in the U.S. or Japan, or a clinical trial applicaons (
CTAs
) in Europe, or a compa-
rable applicaon in other jurisdicons. We cannot be certain of the mely compleon or outcome of our preclinical tesng
and studies and cannot predict if the EMA, FDA, PMDA or other regulatory authories will accept our proposed clinical
programs or if the outcome of our preclinical tesng and studies will ulmately support the further development of these
100 | Risk Factors Related to the Development and Clinical Testing of argenx’s Products and Product Candidates Risk Factors Related to the Development and Clinical Testing of argenx’s Products and Product Candidates | 101
PART II
product candidates. Thus, we cannot be sure that we will be able to submit INDs or CTAs or comparable applicaons for our
preclinical programs on the melines we expect, if at all, and we cannot be sure that submission of INDs or CTAs or compa
-
rable applicaons will result in the EMA, FDA, PMDA or other regulatory authories allowing clinical trials to begin.
Even if clinical trials do begin for these preclinical programs, our development eorts may not be successful, and clinical
trials that we conduct or that third pares conduct on our behalf may not demonstrate sucient safety, purity and po
-
tency or ecacy to obtain the requisite regulatory approvals for any of our products and product candidates or products
and product candidates employing our technology. Many of our clinical trials are blinded, which may cause us to incur
signicant expenses without any visibility as to the likelihood of successful results. For instance, we expect to receive
topline data for the Phase 3 ADVANCE trial of 10 mg/kg efgargimod for the treatment of primary ITP in the second quar
-
ter of 2022. As such study results are blinded, we will not know whether such trial has been successful unl we receive
the data and cannot assure you that such data will contain posive results. Even if we obtain posive results from preclin
-
ical studies or inial clinical trials, we may not achieve the same success in future trials.
Any of these occurrences may harm our business, results of operaons and nancial condion signicantly. In addion,
many of the factors that cause, or lead to, a delay in the commencement or compleon of clinical trials may also ul
-
mately lead to the denial of regulatory approval of our product candidates or result in the development of our product
candidates being stopped early.
The me required to obtain approval by the FDA, EMA, PMDA and comparable foreign authories is unpredictable but
typically takes many years, if obtained at all, following the commencement of clinical trials and depends upon numerous
factors, including the substanal discreon of the regulatory authories. In addion, approval policies, regulaons, or
the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s
clinical development and may vary among jurisdicons. Only VYVGART™ for the treatment of gMG has obtained regulato
-
ry approval in the U.S. and in Japan and we do not currently have any approvals for any other indicaon, in any other ju
-
risdicons or for any other product candidates and it is possible that none of our other exisng product candidates or any
product candidates we may seek to develop in the future will ever obtain regulatory approval in any other jurisdicon
or indicaon. Approval by one regulatory authority does not guarantee approval by another regulatory authority on the
basis of the same data or at all. We have limited experience in subming and supporng the applicaons necessary to
seek regulatory approvals and expect to rely on third-party CROs to assist us in this process. Securing regulatory approval
requires the submission of extensive nonclinical and clinical data and supporng informaon to regulatory authories
for each therapeuc indicaon to establish the product candidate’s safety and ecacy. Securing regulatory approval also
requires the submission of informaon about the product manufacturing process to, and inspecon of manufacturing
facilies by, the regulatory authories.
If we are unable to obtain regulatory approval of our products and product candidates on a mely basis or at all, our
business will be materially impacted. For instance, we have incurred signicant me and expense related to preparaon
for the build-out of our global commercial infrastructure and drug product inventory ahead of the launch of VYVGART™
for the treatment of gMG. An MAA for efgargimod for the treatment of gMG is currently under review with the EMA
with an ancipated decision in the second half of 2022 and we expect Zai Lab to be able to le for approval in Greater
China by mid-2022 and Medison in Israel in the second quarter of 2022. If VYVGART™ is not approved in one or more
jurisdicons other than the U.S. and Japan, or if such approvals are signicantly delayed, it could have a material adverse
eect on our business.
2.2.2 Business interruptions resulting from the COVID-19 pandemic could
cause a disruption of the development of our products and product
candidates and adversely impact our business.
Public health crises such as pandemics or similar outbreaks could adversely impact our business, such as the COVID-19
pandemic. The COVID-19 pandemic is evolving and has already endured several waves and variants, and, as of the date
of this Universal Registration Document, has led to the implementation of various responses, including government-
imposed quarannes, travel restricons and other public health safety measures.
The extent to which the COVID-19 pandemic impacts our business and operaons and those of our collaborators, in
-
cluding clinical development and regulatory eorts, will depend on future developments that are highly uncertain and
cannot be predicted with condence at this me, such as the ulmate geographic spread of the disease, the duraon of
the outbreak, the eecveness of vaccines and other treatments against new variants or mutaons of the disease, the
duraon and eect of business disrupons and the short-term eects and ulmate eecveness of the travel restricons,
quarannes, social distancing requirements and business closures to contain and treat the disease. Accordingly, we do
not yet know the full extent of potenal delays or impacts on our business, our clinical and regulatory acvies and those
of our partners, healthcare systems or the global economy as a whole. However, these impacts could adversely aect our
business, nancial condion, results of operaons and growth prospects. In addion, to the extent the ongoing COVID-19
pandemic adversely aects our business and results of operaons, it may also have the eect of heightening many of the
other risks and uncertaines described herein.
Operaonal impacts of COVID-19
We conduct our clinical trials globally, including in areas impacted by COVID-19 in North America, Europe and Japan. The
connued spread of COVID-19 has and could connue to adversely impact our business and operaons, including our or
our third-party partners’ discovery acvies, preclinical studies and clinical trials. The COVID-19 pandemic, and measures
undertaken to control the spread of the COVID-19 virus, could impair our or our third-party partners’ ability to iniate
clinical trial sites and recruit and retain paents because principal invesgators and site sta, as healthcare providers,
may have heightened exposure to COVID-19 if an outbreak occurs in their geography or due to priorizaon of hospital
resources toward the outbreak and restricons in travel. Furthermore, some paents may be unwilling to enroll in our
or our third-party partners’ trials or be unable to comply with clinical trial protocols if quarannes or travel restricons
impede paent movement or interrupt healthcare services. Paents in our and our third-party partners’ trials are at
increased risk for COVID-19-related health issues due to a number of factors, including their age, the nature of their
disease or stage of their disease. If paents in our or our third-party partners’ trials contract COVID-19, it could adversely
impact the outcome of the trial, including by liming the quality, completeness and interpretability of data that we are
able to collect. As a result of these restricons, enrollment in some of the ongoing trials we or our third-party partners
are conducng has been or may be delayed, but the extent of the full impact is not quanable as a result of the connued
mutaon of the virus and uncertainty as to the eecveness of vaccines and treatments therefor. The pandemic may also
lead to delayed and missed dosing or delayed and missed disease evaluaons for paents that have already been enrolled
in ongoing trials. We and our third-party partners will connue to monitor the impact of COVID-19 on all ongoing clinical
trials and will implement changes as necessary.
We and/or our respecve partners evaluate the advancement of each clinical program on a connuous basis taking into
account the trajectory of COVID-19. If we and/or one of our partners elect not to move forward with some or all of these
clinical programs as a result of the COVID-19 pandemic or otherwise, we would not be entled to some or all of the
future payments which we are eligible to receive under the collaboraon agreement with such partner.
We have been informed by our drug substance and drug product manufacturing partners about potenal limitaons in
the availability of crical manufacturing materials due to the demand outweighing the available manufacturing capacity
for these materials and priorizaons imposed by the U.S. government on the manufacturing of COVID-19 vaccines and
therapeucs. Therefore, we may experience limitaons in manufacturing capacity which could impact our ability to build
adequate inventory as we support the commercial launch of VYVGART™ in gMG, and as we prepare for the commercial
launch of efgargimod in addional indicaons, if approved. We are working closely with our manufacturing partners to
migate those risks to the extent possible.
Since March 2020 when foreign and domestic inspections by the FDA of facilities were largely placed on hold, the
FDA has been working to resume routine surveillance, bioresearch monitoring and pre-approval inspections on a
prioritized basis. Since April 2021, the FDA has conducted limited inspections and employed remote interactive
evaluations, using risk management methods, to meet user fee commitments and goal dates. The FDA is continuing
to complete mission-critical work, prioritize other higher-tiered inspectional needs (e.g., for-cause inspections), and
carry out surveillance inspections using risk-based approaches for evaluating public health. As of the date of this
Universal Registration Document, ongoing travel restrictions and other uncertainties continue to impact oversight
operations. Should the FDA determine that an inspection is necessary for approval of a marketing application and
102 | Risk Factors Related to the Development and Clinical Testing of argenx’s Products and Product Candidates Risk Factors Related to the Development and Clinical Testing of argenx’s Products and Product Candidates | 103
PART II
an inspection cannot be completed during the review cycle due to restrictions on travel, the FDA has stated that
it generally intends to issue, depending on the circumstances, a complete response letter or defer action on the
application until an inspection can be completed. A complete response letter indicates that the review cycle of the
application is complete and the application will not be approved in its present form, and usually describes all of the
specific deficiencies in the new drug application identified by the FDA. The applicant may either resubmit the new
drug application, addressing all of the deficiencies identified in the letter, withdraw the application, or request a
hearing. In 2020 and 2021, a number of companies announced receipt of complete response letters due to the FDA’s
inability to complete required inspections for their applications. Regulatory authorities outside the U.S. may adopt
similar restrictions or other policy measures in response to the COVID-19 pandemic and may experience delays in
their regulatory activities. Such restrictions and delays could adversely affect our ability to obtain regulatory approval
for and to commercialize our products and product candidates and have a material adverse effect on our business
and financial results.
Economic impacts of COVID-19
The spread of COVID-19, which has caused a broad impact globally, may materially aect us economically. While the
potenal economic impact brought by, and the duraon of, COVID-19 may be dicult to assess or predict, a worsening
of the severity or spread of the pandemic could result in signicant disrupon of global nancial markets, reducing
our ability to access capital, which could in the future negavely aect our liquidity. In addion, a recession or market
correcon resulng from the spread of COVID-19 could materially aect our business and the value of our ADSs and/or
our ordinary shares.
Impacts of COVID-19 on employees or other stakeholders
COVID-19 may also negavely impact our employees and our other stakeholders. Precauonary measures that we have
taken, such as temporarily requiring employees to work remotely, suspending all non-essenal travel for our employees
and discouraging employee aendance at industry events, may not succeed in minimizing the risk of infecon to our
employees, and such measures, together with the COVID-19 pandemic, could negavely impact the producvity or
emoonal health and wellbeing of our employees.
2.2.3 We may face ongoing obligations and additional expenses even when and
if our product candidates are approved, and we may face restrictions, market
withdrawal and penalties if we fail to comply with regulatory requirements
or experience unanticipated problems with our products.
When and if the EMA, FDA, PMDA or a comparable regulatory authority approves any of our product candidates, the
manufacturing processes, labelling, packaging, distribution, adverse event reporting, storage, advertising, promo
-
tion and recordkeeping for the product will be subject to extensive and ongoing regulatory requirements. These
requirements include submissions of safety and other post-marketing information and reports, registration, as well
as continued compliance with cGMPs and GCPs for any clinical trials that we conduct post-approval, all of which may
result in significant expense and limit our ability to commercialize such products. In addition, any regulatory approv
-
als that we receive for our product candidates may also be subject to limitations on the approved indicated uses for
which the product may be marketed or to the conditions of approval, or contain requirements for potentially expen
-
sive post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the
product candidate.
Our products and product candidates are classied as biologics in the U.S. and, therefore, can only be sold if we obtain
a BLA from the FDA and therefore cannot be sold in the U.S. if we do not obtain a BLA. The holder of a BLA is obligated
to monitor and report adverse events and any failure of a product to meet the specicaons in the BLA. The holder of
a BLA must also submit new or supplemental applicaons and obtain FDA approval for certain changes to the approved
product, product labelling or manufacturing process.
If there are changes in the applicaon of legislaon, regulaons or regulatory policies, or if problems are discovered with a
product or our manufacture of a product, or if we or one of our distributors, licensees or co-marketers fails to comply with
regulatory requirements, the regulators could take various acons. These include imposing nes on us, imposing restricons
on the product or its manufacture and requiring us to recall or remove the product from the market. The regulators could
also revoke, suspend or withdraw our markeng authorizaons, requiring us to conduct addional clinical trials, change
our product labeling or submit addional applicaons for markeng authorizaon. If any of these events occurs, our ability
to sell such product may be impaired, and we may incur substanal addional expense to comply with regulatory require
-
ments, which could materially adversely aect our business, nancial condion and results of operaons.
2.2.4 Our products and product candidates may have serious adverse, undesirable
or unacceptable side eects or even cause death, and we or others may identify
undesirable or unacceptable side eects caused by VYVGART™ or any of our
product candidates after they receive marketing approval.
Undesirable side effects that may be caused by our product candidates or by the combination of our product candi
-
dates with other medical products could cause us or regulatory authorities to interrupt, delay or halt clinical trials and
could result in a more restrictive label or the delay or denial of regulatory approval by the EMA, FDA, PMDA or other
comparable regulatory authorities. While our preclinical and clinical studies for our product candidates to date show
that our product candidates have generally been well tolerated from a risk-benefit perspective, we have observed
adverse events and TEAEs in our clinical studies to date, and we may see additional adverse events and TEAEs in our
ongoing and future trials, which may be more serious than those observed to date, and as a result, our ongoing and
future trials may be negatively impacted. The drug-related side effects could affect patient recruitment or the ability
of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may
harm our business, results of operation and financial condition significantly. Further, because all of our product candi
-
dates and preclinical programs, which have not yet received approval by at least one regulatory authority other than
VYVGART™ for the treatment of gMG, are based on our SIMPLE Antibody™ platform, any adverse safety or efficacy
findings related to any product candidate or preclinical program may adversely impact the viability of our other prod
-
uct candidates or preclinical programs.
Addionally, if we or others idenfy undesirable or unacceptable side eects caused by VYVGART™ or any of our other
product candidates aer they receive markeng approval, a number of potenally signicant negave consequences
could arise, including:
• regulatory authories may withdraw approvals or revoke licenses of such products and require us to take such
products o the market;
• regulatory authories may require the addion of labeling statements, specic warnings, or a contraindicaon
or request the issuance of eld alerts to physicians and pharmacies;
• regulatory authories may require a medicaon guide outlining the risks of such side eects for distribuon to
paents, or that we implement a REMS plan to ensure that the benets of the product outweigh its risks;
• we may be required to change the way the product is administered, conduct addional clinical trials or change
the labeling of the product;
• we may be subject to limitaons on how we may promote the product;
• sales of the product may decrease signicantly;
• we may be subject to ligaon or product liability claims; and
• our reputaon may suer.
Any of these events could prevent us, our collaborators or our potenal future partners from achieving or maintaining
market acceptance of the aected product or could substanally increase commercializaon costs and expenses, which
in turn could delay or prevent us from generang signicant revenue from the sale of our products. For example, we
understand that another company developing an FcRn antagonist recently iniated a voluntary pause of its ongoing
clinical trials aer an observed signal of elevated total cholesterol and low-density lipoprotein (LDL) levels in one of its
ongoing trials. We have evaluated VYVGART™ in over 600 subjects and paents and to date we have not seen evidence
of evaluaon in cholesterol markers related to treatment with VYVGART™. However, if we were to observe unexpected
adverse events of whatever kind, our trials could be similarly paused and it could have a material adverse eect on our
ability to further the advancement of our product candidates. Further, the FDA or the PMDA could require a change of
104 | Risk Factors Related to the Development and Clinical Testing of argenx’s Products and Product Candidates Risk Factors Related to the Development and Clinical Testing of argenx’s Products and Product Candidates | 105
PART II
label or even revoke the license, which could harm our reputaon and have a material adverse eect on our ability to
commercialize VYVGART™.
2.2.5
We face significant competition for our drug discovery and development eorts.
The market for pharmaceucal products is highly compeve. Our competors we face in the autoimmune eld, the eld
of leukemia and lymphoma and the monoclonal anbody drug discovery eld include many established pharmaceucal
companies, biotechnology companies, universies and other research or commercial instuons, many of which have
substanally greater nancial, research and development resources than we have. Large pharmaceucal companies, in
parcular, have extensive experience in clinical tesng, obtaining regulatory approvals, recruing paents and manufactur
-
ing pharmaceucal products. Smaller and early stage companies may also prove to be signicant competors, parcularly
through collaborave arrangements with large and established companies. These third pares compete with us in recruit
-
ing and retaining qualied scienc and management personnel, establishing clinical trial sites and paent registraon for
clinical trials, as well as in acquiring technologies complementary to, or necessary for, the development of our products.
The elds in which we operate are characterized by rapid technological change and innovaon. There can be no assur
-
ance that our competors are not currently developing, or will not in the future develop, technologies and products that are
equally or more eecve or are more economically aracve than any of our current or future technology or product. Compet
-
ing products or technology plaorms may gain faster or greater market acceptance than our products or technology plaorms
and medical advances or rapid technological development by competors may result in our products and product candidates
or technology plaorms becoming non-compeve or obsolete before we are able to recover our research and development
and commercializaon expenses. If we, our products and product candidates or our technology plaorms do not compete
eecvely, it is likely to have a material adverse eect on our business, nancial condion and results of operaon.
2.2.6 We depend on enrollment of patients in our clinical trials for our product
candidates.
Idenfying and qualifying paents to parcipate in our clinical trials is crical to our success. Paent enrollment depends on
many factors, including the size and nature of the paent populaon, eligibility criteria for the trial, the proximity of paents to
clinical sites, the design of the clinical protocol, the availability of compeng clinical trials, the availability of new drugs approved
for the indicaon the clinical trial is invesgang, and clinicians’ and paents’ percepons as to the potenal advantages of the
drug being studied in relaon to other available therapies. Since some of our product candidates are focused on addressing rare
diseases and condions, there are limited paent pools available to complete our clinical trials in a mely and cost-eecve
manner. For example, the number of paents suering from each of MG, ITP, PV, PF, CIDP, T-cell lymphoma (
TCL
) and AML is small and has not been established with precision. If the actual number of paents with these disorders is smaller than we an
-
cipate, we may encounter dicules in enrolling paents in our clinical trials, thereby delaying or prevenng development and
approval of our drug candidates. Even once enrolled we may be unable to retain a sucient number of paents to complete any
of our trials. In addion, a limited number of paents enrolled in our clinical trials are located in Russia or Ukraine. The conict
between Russia and Ukraine (also see risk factor 2.7.4 “Global economic uncertainty and weakening product demand caused by
polical instability, changes in trade agreements and conicts, such as the conict between Russia and Ukraine, could adversely
aect our business and nancial performance.”) may prevent their connued parcipaon in such trials and may prevent us
from enrolling new paents from such countries which, in turn, may cause delays in certain ongoing clinical trials. For example,
a relevant minority of the paents in the ADDRESS trial of SC efgargimod for PF and PV are parcipang in studies conducted
in Ukraine or Russia. Accordingly, we expect that the conict between Russia and Ukraine will delay our ADDRESS trials, with the
ming of topline data for the ADDRESS trial of SC efgargimod for PF and PV currently under review.
Furthermore, our eorts to build relaonships with paent communies may not succeed, which could result in delays in
paent enrollment in our clinical trials. In addion, any negave results we may report in clinical trials of our drug candi
-
date may make it dicult or impossible to recruit and retain paents in other clinical trials of that same drug candidate.
Delays in the compleon of any clinical trial of our product candidates will increase our costs, slow down our product
candidate development and approval process and delay or potenally jeopardize our ability to commence product sales
and generate revenue. In addion, some of the factors that cause, or lead to, a delay in the commencement or comple
-
on of clinical trials may also ulmately lead to the denial of regulatory approval of our product candidates.
2.2.7 Regional political instability, changes in trade agreements and conflicts, such
as the conflict between Russia and Ukraine could cause a disruption of the
development of our products and product candidates, by impairing regulatory
approval processes, and could thereby adversely impact our business.
We are conducng certain clinical trials in a large number of jurisdicons, including in Russia and Ukraine. Global con
-
icts, including the conict between Russia and Ukraine, as well as economic sancons implemented by the U.S., the
European Union and other countries against Russia in response thereto, may cause disrupon of regulatory acvies
relang to clinical development acvies performed in aected regions, including the ability of regulatory authories to
conduct inspecons at our clinical trial sites. For example, study data collected at Russian or Ukrainian sites may not be
t for submission as part of a regulatory approval process due to incompleteness or due to the fact that auding of the
data was not (fully) possible. This could delay data read-out points for our studies although we are currently insuciently
certain if and by how much such delays would occur. While at the date of this Universal Registraon Document we have
no indicaon that the conict between Russia and Ukraine and the corresponding sancons imposed on Russia will hin
-
der regulatory acvies relevant for our pending or expected approval requests, we cannot predict the eect the conict
may have on regulatory acvies in aected areas in the near future, and we cannot predict the range of areas that will
be ulmately aected, and the direct or indirect negave impact this may have on our business. For example, as of the
date of this Universal Registraon Document, ongoing travel restricons, the COVID-19 pandemic and other uncertaines
connue to impact FDA’s oversight operaons including roune surveillance, bioresearch monitoring and pre-approval
inspecons. In addion, we perform development acvies in a number of countries neighboring Russia and Ukraine. If
the conict between Russia and Ukraine would escalate further, neighboring and other countries may be impacted which
could also have an impact on our development acvies in those countries.
2.2.8 We may become exposed to costly and damaging liability claims.
We are exposed to potenal product liability and professional indemnity risks that are inherent in the research, devel
-
opment, manufacturing, markeng and use of pharmaceucal products. Currently, we have only VYVGART™ has been
approved in the U.S. and in Japan for commercial sale for the treatment of gMG; however, the current and future use of
product candidates by us and our collaborators in clinical trials, and the sale of any approved products, may expose us
to liability claims. These claims might be made by paents who use the product, healthcare providers, pharmaceucal
companies, our collaborators or others selling such products. Any claims against us, regardless of their merit, could be
dicult and costly to defend and could materially adversely aect the market for our products and product candidates or
any prospects for commercializaon of our products and product candidates. Although the clinical trial process is designed
to idenfy and assess potenal side eects, it is always possible that a drug, even aer regulatory approval, may exhibit
unforeseen side eects. If any of our product candidates were to cause adverse side eects during clinical trials or aer
approval of the product candidate, we may be exposed to substanal liabilies. Physicians and paents may not comply
with any warnings that idenfy known potenal adverse eects and paents who should not use our product candidates.
Regardless of the merits or eventual outcome, liability claims may result in:
• decreased demand for our products due to negave public percepon;
• damage to our reputaon;
• withdrawal of clinical trial parcipants or dicules in recruing new trial parcipants;
• iniaon of invesgaons by regulators;
• costs to defend or sele the related ligaon;
• a diversion of management’s me and our resources;
• substanal monetary awards to trial parcipants or paents;
• product recalls, withdrawals or labeling, markeng or promoonal restricons;
• loss of revenues from product sales; and
• the inability to commercialize any of our product candidates, if approved.
Although we maintain product liability insurance for our product candidates, the coverage of which we have extended to
include the sale of VYVGART™, and we expect to expand our insurance coverage further if we obtain markeng approv
-
106 | Risk Factors Related to the Development and Clinical Testing of argenx’s Products and Product Candidates Risk Factors Related to the Development and Clinical Testing of argenx’s Products and Product Candidates | 107
PART II
al for any of our other product candidates, we may not be able to maintain insurance coverage at a reasonable cost or
to obtain insurance coverage that will be adequate to sasfy any liability that may arise. If a successful product liability
claim or series of claims is brought against us for uninsured liabilies or in excess of insured liabilies, our assets may not
be sucient to cover such claims and our business operaons could be impaired.
Should any of the events described above occur, this could have a material adverse eect on our business, nancial con
-
dion and results of operaons.
2.3 Risk Factors Related to
Commercialization of argenx’s
Products and Product Candidates
2.3.1 We will face significant challenges in successfully commercializing
our products.
We are in the process of connuing to setup our sales and markeng infrastructure, have limited experience in the sale or
markeng of pharmaceucal products and may not or not mely have the appropriate infrastructure in place (including,
such as informaon technology, enterprise resource planning and forecasng). To achieve commercial success for any ap
-
proved product, we must develop or acquire a sales and markeng organizaon, outsource these funcons to third pares
or enter into collaboraon arrangements with third pares. While we have established our own sales force in the U.S.
and in Japan for VYVGART™ for the treatment of gMG, we plan to expand our own sales and markeng capabilies and
promote our products and product candidates if and when regulatory approval has been obtained in the relevant jurisdic
-
ons and/or for other product candidates or other indicaons. There are risks involved should we decide to expand our
own sales and markeng capabilies or enter into arrangements with third pares to perform these services. Even if we
have established or expanded our own sales and markeng capabilies, we may fail to launch our products eecvely or
to market our products eecvely. Recruing and training a sales force is expensive and costs of creang an independent
sales and markeng organizaon and of markeng and promoon could be above those ancipated by us. In addion, re
-
cruing and training a sales force is me consuming and could delay any product launch. In the event that any such launch
is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercializa
-
on expenses, and our investment would be lost if we cannot retain or reposion our sales and markeng personnel.
If we enter into arrangements with third pares to perform sales and markeng services, e.g., such as our agreement with
Medison in connecon with the commercializaon of VYVGART™ for gMG in Israel, our product revenues or the protabil
-
ity of these product revenues to us could be lower than if we were to market and sell any products that we develop our
-
selves. Such collaborave arrangements may place the commercializaon of our products outside of our control and would
make us subject to a number of risks. This includes the risk that we may not be able to control the amount or ming of
resources that our collaborave partner devotes to our products or that our collaborator’s willingness or ability to comply
with and complete its obligaons under our arrangements may be adversely aected by business combinaons or signi
-
cant changes in our collaborator’s business strategy. In addion, we may not be successful in entering into arrangements
with third pares to sell and market our products or may be unable to do so on terms that are favorable to us. Acceptable
third pares may fail to devote the necessary resources and aenon to sell and market our products eecvely.
If we do not establish sales and markeng capabilies successfully, either on our own or in collaboraon with third
pares, we may not be successful in commercializing our products, which in turn would have a material adverse eect
on our business, nancial condion and results of operaons.
2.3.2 The future commercial success of our products and product candidates will
depend on the degree of market acceptance.
When available on the market, our products may not achieve an adequate level of acceptance by physicians, paents and
the medical community, and we may not become protable. For instance, our products and product candidates may not
achieve an adequate level of acceptance by physicians because of dosing complexity or from paents because of infusion
fague. In addion, eorts to educate the medical community and third-party payers on the benets of our products may
require signicant resources and may never be successful which would prevent us from generang signicant revenues
or becoming protable. Market acceptance of our future products by physicians, paents and healthcare payers will
depend on a number of factors, many of which are beyond our control, including, but not limited to:
• the wording of the product label;
• changes in the standard of care for the targeted indicaons for any product and product candidate;
• sales, markeng and distribuon support;
• potenal product liability claims;
• acceptance by physicians, paents and healthcare payers of each product as safe, eecve and cost-eecve;
• relave convenience, ease of use, ease of administraon and other perceived advantages over alternave products;
• prevalence and severity of adverse events or publicity;
• limitaons, precauons or warnings listed in the summary of product characteriscs, paent informaon leaet,
package labeling or instrucons for use;
• the cost of treatment with our products in relaon to alternave treatments;
• the extent to which products are approved for inclusion and reimbursed on formularies of hospitals and managed
care organizaons; and
• whether our products are designated in the label, under physician treatment guidelines or under reimbursement
guidelines as a rst-line, second-line, or third-line or last-line therapy.
If our products or product candidates fail to gain market acceptance, this will have a material adverse impact on our abili
-
ty to generate revenues. Even if some products achieve market acceptance, the market may prove not to be large enough
to allow us to generate signicant revenues.
2.3.3 Our products and product candidates for which we have obtained or intend to seek
approval as biological products may face competition sooner than anticipated.
The BPCIA created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with
an FDA-licensed reference biological product. Under the BPCIA, an applicaon for a biosimilar product may not be sub
-
mied to the FDA unl four years following the date that the reference product was rst licensed by the FDA. In addion,
the approval of a biosimilar product may not be made eecve by the FDA unl twelve years from the date on which
the reference product was rst licensed. During this twelve-year period of exclusivity, another company may sll market
a compeng version of the reference product if the FDA approves a full BLA for the compeng product containing the
sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity
and potency of their product. The law is complex and is sll being interpreted and implemented by the FDA. As a result,
its ulmate impact, implementaon and meaning are subject to uncertainty.
We believe that any of our product candidates approved as a biological product under a BLA should qualify for the
twelve-year period of exclusivity, as was the case with VYVGART™. However, there is a risk that this exclusivity could
be shortened due to congressional acon or otherwise, or that the FDA will not consider our product candidates to be
reference products for compeng products, potenally creang the opportunity for generic compeon sooner than
ancipated. Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the
subject of recent ligaon. Moreover, the extent to which a biosimilar product, once approved, will be substuted for
any one of our reference products in a way that is similar to tradional generic substuon for non-biological products
is not yet clear, and will depend on a number of marketplace and regulatory factors that are sll developing.
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PART II
2.3.4 Enacted and future legislation may increase the diculty and cost for us to ob-
tain marketing approval of and commercialize our products and product candi-
dates and may aect the prices we may set.
In the U.S., the European Union and other foreign jurisdicons, there have been a number of legislave and regulatory
changes to the healthcare system that could aect our future results of operaons. In parcular, there have been and
connue to be a number of iniaves at the U.S. federal and state levels that seek to reduce healthcare costs and improve
the quality of healthcare. If such legislave and/or regulatory iniaves and changes would lead to increased restricons
on markeng our products, or lead to liming the funds available for healthcare in jurisdicons relevant to us which may
reduce reimbursement levels and is likely to aect the prices we may set, we would be negavely impacted in our ability
to successfully and protably market our products and product candidates.
We cannot predict the likelihood, nature or extent of government regulaon that may arise from future legislaon or
administrave acon, either in the U.S. or abroad. If we or our collaborators are slow or unable to adapt to changes in
exisng requirements or the adopon of new requirements or policies, or if we or our collaborators are not able to main
-
tain regulatory compliance, our products and product candidates may lose any regulatory approval that may have been
obtained and we may not achieve or sustain protability, which would adversely aect our business.
2.3.5 We may not obtain or maintain adequate coverage or reimbursement status
for our products and product candidates.
Our ability to successfully commercialize VYVGART™ or any other products and product candidate approved for commercial
-
izaon will depend, in part, on the extent to which third-party payors, including government health programs in the United
States (such as Medicare and Medicaid) and other countries, commercial health insurers, and managed care organizaons,
provide coverage and establish adequate reimbursement levels for such products and product candidates. Moreover, in
-
creasing eorts by governmental and third-party payors in the European Union, the U.S., China and abroad to cap or reduce
healthcare costs may cause such organizaons to limit both coverage and the level of reimbursement for newly approved
products and, as a result, they may not cover or provide adequate payment for VYVGART™ or any other of our products and
product candidates approved for commercializaon. Limitaons on reimbursement and reimbursement levels may diminish
or prevent altogether any signicant demand for VYVGART™ or our other product candidates once approved and/or may
prevent us enrely from entering certain markets, which would prevent us from generang signicant revenues or becoming
protable, which would adversely aect our business, nancials and results of operaons.
2.3.6 We may be subject to healthcare laws, regulation and enforcement.
Our failure to comply with these laws could harm our results of operations
and financial conditions.
Our current and future operaons may be directly, or indirectly through our customers and third-party payors, subject
to various U.S. federal and state, European, Japanese and Chinese healthcare laws and regulaons, including, without
limitaon, the U.S. federal An-Kickback Statute. Healthcare providers, physicians and others play a primary role in the
recommendaon and prescripon of any products for which we obtain markeng approval. These laws may impact,
among other things, our proposed sales, markeng and educaon programs and constrain our business and nancial
arrangements and relaonships with third-party payors, healthcare professionals who parcipate in our clinical research
program, healthcare professionals and others who recommend, purchase, or provide our approved products, and other
pares through which we market, sell and distribute our products for which we obtain markeng approval. In addion,
we may be subject to paent data privacy and security regulaon by both the U.S. federal government and the other
states and countries in which we conduct our business. Finally, our current and future operaons are subject to addion
-
al healthcare-related statutory and regulatory requirements and enforcement by regulatory authories in jurisdicons in
which we conduct our business. For example, the provision of benets or advantages to physicians to induce or encour
-
age the prescripon, recommendaon, endorsement, purchase, supply, order or use of medicinal products is generally
not permied in the countries that form part of the European Union. Some European Union member states have enacted
laws explicitly prohibing the provision of these types of benets and advantages to induce or reward improper perfor
-
mance generally, and the United Kingdom has enacted such laws through the Bribery Act 2010. Infringements of these
laws can result in substanal nes and imprisonment. EU Direcve 2001/83/EC, which is the EU direcve governing
medicinal products for human use, further provides that, where medicinal products are being promoted to persons qual
-
ied to prescribe or supply them, no gis, pecuniary advantages or benets in kind may be supplied, oered or promised
to such persons unless they are inexpensive and relevant to the pracce of medicine or pharmacy. This provision has
been transposed into the Human Medicines Regulaons 2012 and remains applicable in the United Kingdom. Any acon
against us for violaon of these laws, even if we successfully defend against it, could cause us to incur signicant legal
expenses and divert our management’s aenon from the operaon of our business.
The shiing compliance environment and the need to build and maintain robust and expandable systems to comply
with mulple jurisdicons with dierent compliance or reporng requirements increases the possibility that a healthcare
company may run afoul of one or more of the requirements. We have limited experience in the sale or markeng of phar
-
maceucal products and we are building and, in light of any future approval and commercializaon, will need to connue
building an internal program to ensure compliance with the dierent health care laws and regulaons. The establish
-
ment, expansion and maintenance of an internal compliance program will involve substanal costs and the program may
not be successful in complying with the dierent reporng requirements.
It is possible that governmental authorities will conclude that our business practices do not comply with current or
future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.
If our operations are found to be in violation of any of these laws or any other governmental regulations that may
apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement,
imprisonment, exclusion of drugs from government funded healthcare programs, such as Medicare and Medicaid,
additional reporting requirements and oversight if we become subject to a corporate integrity agreement or sim
-
ilar agreement to resolve allegations of non-compliance with these laws, reputational harm and the curtailment
or restructuring of our operations. Defending against any such actions can be costly and time-consuming and may
require significant financial and personnel resources. Therefore, even if we are successful in defending against any
such actions that may be brought against us, our business may be impaired. Further, if any of the physicians or other
healthcare providers or entities with whom we expect to do business is found to be not in compliance with applicable
laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded
healthcare programs.
The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of
healthcare reform. Federal and state enforcement bodies have recently increased their scruny of interacons between
healthcare companies and healthcare providers, which has led to a number of invesgaons, prosecuons, convicons
and selements in the healthcare industry. Ensuring business arrangements comply with applicable healthcare laws, as
well as responding to possible invesgaons by government authories, can be me and resource consuming and can
divert a company’s aenon from the business.
Eorts to ensure that our business arrangements with third pares will comply with applicable healthcare laws and
regulaons will involve substanal costs.
In addion, in the United States, the European Union and other foreign jurisdicons, there have been a number of
legislave and regulatory changes to the healthcare system that could aect our future results of operaons. In parc
-
ular, there have been and connue to be a number of iniaves at the U.S. federal and state levels that seek to reduce
healthcare costs, including the cost of prescripon drugs, and improve the quality of healthcare. If such legislave and/
or regulatory iniaves and changes would lead to increased restricons on the markeng of VYVGART™ or any of our
products and product candidates approved for commercializaon, or lead to liming the funds available for healthcare
in jurisdicons relevant to us which may reduce reimbursement levels and is likely to aect the prices we may set, we
would be negavely impacted in our ability to successfully and protably market VYVGART™ or any of our products and
product candidates approved for commercializaon.
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PART II
2.3.7 We are subject to privacy laws, regulation and potential enforcement.
Our failure to comply with these laws could harm our results of operations
and financial conditions.
In Europe, Direcve 2002/58/EC of the European Parliament and of the Council of July 12, 2002 concerning the processing
of personal data and the protecon of privacy in the electronic communicaons sector (as amended, the
e-Privacy-Direcve
)
required the EU member states to implement data protecon laws to meet strict privacy requirements. Violaons of these
requirements can result in administrave measures, including nes, or criminal sancons. The e-Privacy Direcve will likely
be replaced in me by a new e-Privacy Regulaon which may impose addional obligaons and risk for our business.
Since May 25, 2018, Regulaon (EU) 2016/679 of the European Parliament and of the Council of April 27, 2016 on the
protecon of natural persons with regard to the processing of personal data and on the free movement of such data (the
GDPR
) imposes a broad range of strict requirements on companies, including requirements relang to having legal bases
for processing personal informaon relang to idenable individuals and transferring such informaon outside the EEA
including to the U.S. or China, providing details to those individuals regarding the processing of their personal informaon,
keeping personal informaon secure, having data processing agreements with third pares who process personal infor
-
maon, responding to individuals’ requests to exercise their rights in respect of their personal informaon, reporng
security breaches involving personal data to the competent naonal data protecon authority and aected individuals,
appoinng data protecon ocers, conducng data protecon impact assessments, and record-keeping. The GDPR
substanally increases the penales to which we could be subject in the event of any non-compliance, including nes of
up to 10,000,000 Euros or up to 2% of our total worldwide annual turnover for certain comparavely minor oenses, or
up to 20,000,000 Euros or up to 4% of our total worldwide annual turnover for more serious oenses. We face uncertainty
as to the exact interpretaon of the requirements under the GDPR, and we may be unsuccessful in implemenng all
measures required by data protecon authories or courts in interpretaon of the GDPR.
In parcular, naonal laws of member states of the EU have been adapted to the requirements under the GDPR, thereby
implemenng naonal laws which may parally deviate from the GDPR and impose dierent obligaons from country to
country, so that we do not expect to operate in a uniform legal landscape in the EU. Also, in the eld of handling genec
data, the GDPR specically allows EU member states laws to impose addional and more specic requirements or restric
-
ons, and European laws have historically diered quite substanally in this eld, leading to addional uncertainty.
We must also ensure that we maintain adequate safeguards to enable the transfer of personal data outside of the EEA,
in parcular to the U.S. and China, in compliance with EU data protecon laws, including the GDPR. We expect that we
will connue to face uncertainty as to whether our eorts to comply with our obligaons under European privacy laws
will be sucient. If we are invesgated by any EU data protecon authority, we may face nes and other penales. Any
such invesgaon or charges by EU data protecon authories could have a negave eect on our exisng business and
on our ability to aract and retain new clients or pharmaceucal partners. We may also experience hesitancy, reluctance,
or refusal by EU or mul-naonal clients or pharmaceucal partners to connue to use our products and soluons due
to the potenal risk exposure as a result of the current (and, in parcular, future) data protecon obligaons imposed on
them by certain data protecon authories in interpretaon of current law, including the GDPR. Such clients or phar
-
maceucal partners may also view any alternave approaches to compliance as being too costly, too burdensome, too
legally uncertain, or otherwise objeconable and therefore decide not to do business with us. Any of the foregoing could
materially harm our business, prospects, nancial condion and results of operaons.
2.3.8 If we fail to obtain orphan drug designation or obtain or maintain orphan
drug exclusivity for our products, our competitors may sell products to
treat the same conditions and our revenue will be reduced.
Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if it is intended to treat a rare disease or
condion, dened as a paent populaon of fewer than 200,000 in the U.S., or a paent populaon greater than 200,000
in the U.S. where there is no reasonable expectaon that the cost of developing the drug will be recovered from sales
in the U.S. In the European Union, aer a recommendaon from the EMA’s Commiee for Orphan Medicinal Products
(
COMP
) the European Commission grants orphan drug designaon to promote the development of products that are
intended for the diagnosis, prevenon or treatment of a life-threatening or chronically debilitang condion either aect
-
ing not more than ve in 10,000 persons in the European Union or when, without incenves, it is unlikely that sales of
the drug in the European Union would be sucient to jusfy the necessary investment in developing the drug or biolog
-
ical product. In each case there must be no sasfactory method of diagnosis, prevenon or treatment of such condion,
or, if such a method exists, the medicine must be of signicant benet to those aected by the condion.
In the U.S., orphan drug designaon entles a party to nancial incenves such as opportunies for grant funding to
-
wards clinical trial costs, tax advantages and user-fee waivers. In addion, if a product receives the rst FDA approval for
the indicaon for which it has orphan designaon, the product is entled to orphan drug exclusivity, which means the
FDA may not approve any other applicaon to market the same drug for the same indicaon for a period of seven years,
except in limited circumstances, such as a showing of clinical superiority over the product with orphan exclusivity or
where the manufacturer is unable to assure sucient product quanty. In the European Union, orphan drug designaon
entles a party to nancial incenves such as reducon of fees or fee waivers and ten years of market exclusivity follow
-
ing drug or biological product approval. This period may be reduced to six years if the orphan drug designaon criteria
are no longer met, including where it is shown that the product is suciently protable not to jusfy maintenance of
market exclusivity. If we fail to obtain or if we lose orphan drug status for one or more of our products and product candi
-
dates, the aforemenoned incenves and market exclusivity may not or no longer be available to us, which is likely to in
-
crease the overall cost of development and to decrease the compeve posion of such product and product candidate.
We may from me to me seek orphan drug designaon in the U.S. or Europe for certain indicaons addressed by our
products and product candidates. For example, in September 2017, the FDA granted orphan drug designaon for the
use of VYVGART™ for gMG, in January 2019, the FDA granted orphan drug designaon for the use of efgargimod for
the treatment of Primary Immune Thrombocytopenia and for the use of cusatuzumab for the treatment of AML and in
August 2021, the FDA granted orphan drug designaon for the use of efgargimod co-formulated with rHuPH20 for the
treatment of Inammatory Demyelinang Polyneuropathy. Even if we are able to obtain orphan designaon, we may not
be the rst to obtain markeng approval for such indicaon due to the uncertaines associated with developing pharma
-
ceucal products. In addion, exclusive markeng rights in the U.S. may be limited if we seek approval for an indicaon
broader than the orphan-designated indicaon or may be lost if the FDA later determines that the request for designa
-
on was materially defecve or if the manufacturer is unable to assure sucient quanes of the product to meet the
needs of paents with the rare disease or condion. Further, even if we obtain orphan drug exclusivity for a product,
that exclusivity may not eecvely protect the product from compeon because dierent drugs with dierent acve
moiees can be approved for the same condion. Even aer an orphan drug is approved, the FDA or the EMA can subse
-
quently approve the same drug with the same acve moiety for the same condion if the FDA or the EMA concludes that
the later drug is safer, more eecve, or makes a major contribuon to paent care. Orphan drug designaon neither
shortens the development me or regulatory review me of a drug nor gives the drug any advantage in the regulatory
review or approval process.
2.3.9 We may not obtain or maintain adequate coverage or reimbursement status for
our products and product candidates.
Even when and if our products and product candidates are approved for markeng, sales of such products and product
candidates will depend, in part, on the extent to which third-party payors, including government health programs in the
U.S. (such as Medicare and Medicaid) and other countries, commercial health insurers, and managed care organizaons,
provide coverage and establish adequate reimbursement levels for such products and product candidates. Moreover,
increasing eorts by governmental and third-party payors in the European Union, the U.S., China and abroad to cap or
reduce healthcare costs may cause such organizaons to limit both coverage and the level of reimbursement for newly
approved products and, as a result, they may not cover or provide adequate payment for our products and product can
-
didates. For instance, access to VYVGART™ for the treatment of gMG may be restricted by limited payer coverage due to
treatment criteria, which may prevent us from realizing its full commercial potenal.
112 | Risk Factors Related to Commercialization of argenx’s Product Candidates Risk Factors Related to Commercialization of argenx’s Product Candidates | 113
PART II
Limitaons on reimbursement and reimbursement levels may diminish or prevent altogether any signicant demand for
our products and/or may prevent us enrely from entering certain markets, which would prevent us from generang sig
-
nicant revenues or becoming protable, which would adversely aect our business, nancials and results of operaons.
2.3.10 We may not be able to successfully achieve support among healthcare provid-
ers and third-party payors for our products and product candidates, and our
relationships with such parties are subject to regulations.
Our current and future arrangements with providers, researchers, consultants, third-party payors and customers are
subject to broadly applicable naonal, federal and state fraud and abuse, an-kickback, false claims, transparency and
paent privacy laws and regulaons and other healthcare laws and regulaons that may constrain our business and/or
nancial arrangements.
We will be required to spend substanal me and money to ensure that our business arrangements with third pares
comply with applicable healthcare laws and regulaons. Recent healthcare reform legislaon has strengthened these
federal and state healthcare laws. Violaons of these laws can subject us to criminal, civil and administrave sancons
including monetary penales, damages, nes, disgorgement, individual imprisonment and exclusion from parcipaon
in government funded healthcare programs, such as Medicare and Medicaid, addional reporng requirements and over
-
sight if we become subject to a corporate integrity agreement or similar agreement to resolve allegaons of non-com
-
pliance with these laws, reputaonal harm, and the required curtailment or restructuring of our operaons. Moreover,
we expect that there will connue to be federal and state laws and regulaons, proposed and implemented, that could
impact our business, nancial condion and results of operaons.
2.4 Risk Factors Related to argenx’s
Business and Industry
2.4.1 Nearly all aspects of our activities are subject to substantial regulation.
No assurance can be given that any of our products and product candidates
will fulfill regulatory compliance. Failure to comply with such regulations
could result in delays, suspension, refusals and withdrawal of approvals,
as well as fines.
The international biopharmaceutical and medical technology industries are subject to a high level of regulation by
the FDA, the EMA, the PMDA and other comparable regulatory authorities and by other national or supra-national
regulatory authorities. Applicable regulations impose substantial requirements covering nearly all aspects of our
activities and the activities of our partners and licensees, notably on research and development, manufacturing,
preclinical tests, clinical trials, labeling, marketing, sales, storage, record keeping, promotion and pricing of our
products and product candidates.
Failure to (mely) comply with regulatory requirements could have far reaching consequences for us, including signicant
delay in our product development as a result of regulatory authories recommending non-approval or restricons on, or
withdrawal of, approval of a product candidate. Any failure or delay of any of our product candidates in clinical studies
or to receive or maintain regulatory approval could have a material adverse eect on our business, results of operaons
and nancial condion. If any of our product candidates fails to obtain approval on the basis of any applicable condensed
regulatory approval process, this will prevent such product candidate from obtaining approval in a shortened me frame,
or at all, resulng in increased expenses which would materially harm our business.
Regulaons dier substanally per jurisdicon and are subject to constant change. In order to market our future products
in regions such as the EEA, the U.S., Asia Pacic and many other foreign jurisdicons, we must obtain separate regulatory
approvals. The approval procedures vary among countries and can require addional clinical tesng, and the me required
to obtain approval may dier from that required to obtain approval. Moreover, clinical studies conducted in one country
may not be accepted by regulatory authories in other countries. Approval by the EMA, the FDA or the PMDA does not
ensure approval by the comparable authories in other countries, and approval by one or more foreign regulatory authori
-
es does not ensure approval by regulatory authories in other foreign countries or by the EMA, the FDA or the PMDA.
There can be no assurance that our product candidates will fulfil the criteria required to obtain necessary regulatory
approval to access the market. Also, at this time, we cannot guarantee or know the exact nature, precise timing and
detailed costs of the efforts that will be necessary to complete the remainder of the development of our research
programs and product candidates. Each of the FDA, EMA, PMDA and other comparable regulatory authorities may
impose its own requirements, may discontinue an approval or revoke a license, may refuse to grant approval, or may
require additional data before granting approval, notwithstanding that approval may have been granted by the FDA,
EMA, PMDA or one or more other comparable foreign authority. The FDA, EMA, PMDA or other comparable regula
-
tory authorities may also approve a product candidate for fewer or more limited indications or patient sub-segments
than requested or may grant approval subject to the performance of post-marketing studies. The EMA’s, the FDA’s, the
PMDA’s or other regulatory authority’s approval may be delayed, limited or denied for a number of reasons, most of
which are beyond our control. Such reasons could include, among others, the production process or site not meet
-
ing the applicable requirements for the manufacture of regulated products, or the products not meeting applicable
requirements for safety, purity or potency, or efficacy, during the clinical development stage or after marketing.
The FDA, EMA, PMDA and other comparable regulatory authorities have substantial discretion in the approval process
and determining when or whether regulatory approval will be obtained for any of our product candidates. Any of the
FDA, EMA, PMDA and other comparable regulatory authorities may disagree with our interpretation of data submit
-
ted for their review. Even if we believe the data collected from clinical trials of our product candidates are promising,
such data may not be sufficient to support approval by the FDA, EMA, PMDA or any other regulatory authority. For
instance, we have submitted a request for approval of VYVGART™ in gMG to the EMA and anticipate receipt of such
approval in the first quarter of 2022 and the second half of 2022, respectively, but can provide no assurances that
such approval will be obtained on the timeline that we expect or at all. In addition, we anticipate to file requests for
approval of VYVGART™ in new indications, but can provide no assurances that such requests will be accepted or that
approval will be obtained on the timeline that we expect or at all. Furthermore, the FDA has resumed inspections
of certain domestic clinical trial operations and trial sites. We cannot be sure to be ready for such an inspection of
the clinical trial operations or trial site by the FDA or other regulatory authorities in view of the substantial time and
attention devoted by our personnel to the commercial launch of VYVGART™ for the treatment of gMG.
We and our collaborative partners are, or may become subject to, numerous ongoing other regulatory obligations,
such as data protection, environmental, health and safety laws and restrictions on the experimental use of animals.
The costs of compliance with such applicable regulations, requirements or guidelines could be substantial, and failure
to comply could result in sanctions, including fines, injunctions, civil penalties, denial of applications for marketing
authorization of our products, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of
products, operating restrictions and criminal prosecutions, any of which could significantly increase our or our collabo
-
rative partners’ costs or delay the development and commercialization of our product candidates.
The time required to obtain approval by the FDA, EMA, PMDA and comparable regulatory authorities is unpredictable
but typically takes many years, if obtained at all, following the commencement of clinical trials and depends upon nu
-
merous factors, including the substantial discretion of the regulatory authorities. This lengthy approval process as well
as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval to market
any of our product candidates, including VYVGART™ for the treatment of gMG in jurisdictions outside the U.S. and
Japan or for other indications, which would significantly harm our business, results of operations and prospects.
In addition, even when and if we obtain approval, regulatory authorities may approve any of our products and product
candidates for fewer or more limited indications than we request, may not approve the price we intend to charge for
our products, may grant approval contingent on the performance of costly post-marketing clinical trials, or may ap
-
prove a product candidate with a label that does not include the labeling claims necessary or desirable for the success
-
ful commercialization of that product candidate. Any of the foregoing scenarios could materially harm the commercial
prospects for our product candidates.
114 | Risk Factors Related to argenx’s Business and Industry Risk Factors Related to argenx’s Business and Industry | 115
PART II
2.4.2 We may become exposed to liability and substantial expenses in connection
with environmental compliance or remediation activities.
Our operaons, including our research, development, tesng and manufacturing acvies, are subject to numerous
environmental, health and safety laws and regulaons. These laws and regulaons govern, among other things, the con
-
trolled use, handling, release and disposal of and the maintenance of a registry for, hazardous materials and biological
materials, such as chemical solvents, human cells, carcinogenic compounds, mutagenic compounds and compounds that
have a toxic eect on reproducon, laboratory procedures and exposure to blood-borne pathogens. If we fail to comply
with such laws and regulaons, we could be subject to nes or other sancons.
We face a risk of environmental liability inherent in our current and historical acvies, including liability relang to
releases of or exposure to hazardous or biological materials. Environmental, health and safety laws and regulaons are
becoming more stringent. We may be required to incur substanal expenses in connecon with future environmental
compliance or remediaon acvies, in which case, our producon and development eorts may be interrupted or
delayed, and our nancial condion and results of operaons may be materially adversely aected.
2.4.3 Our employees and relevant third parties may engage in misconduct
or other improper activities, including non-compliance with regulatory
standards and requirements, which could have a material adverse eect
on our business.
We are exposed to the risk that our employees, independent contractors, principal invesgators, CROs, consultants,
vendors and collaboraon partners may engage in fraudulent conduct or other illegal acvies. Misconduct by these
pares could include intenonal, reckless and negligent conduct, data manipulaon (scienc fraud) or unauthorized
acvies that violate: (i) the regulaons of the FDA, EMA, PMDA and other comparable regulatory authories, including
those laws that require the reporng of true, complete and accurate informaon to such authories; (ii) manufacturing
standards; (iii) federal and state data privacy, security, fraud and abuse and other healthcare laws and regulaons in the
U.S. and in other countries; or (iv) laws that require the reporng of true, complete and accurate nancial informaon
and data. Specically, sales, markeng and business arrangements in the healthcare industry are subject to extensive
laws and regulaons intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive pracces. These
laws and regulaons may restrict or prohibit a wide range of pricing, discounng, markeng and promoon, sales
commission, customer incenve programs and other business arrangements. Acvies subject to these laws could
also involve the improper use or misrepresentaon of informaon obtained in the course of clinical trials or creang
fraudulent data in our preclinical studies or clinical trials, which could result in regulatory sancons and cause serious
harm to our reputaon. It is not always possible to idenfy and deter misconduct by employees and other third pares,
and the precauons we take to detect and prevent this acvity may not be eecve in controlling unknown or unman
-
aged risks or losses or in protecng us from governmental invesgaons or other acons or lawsuits stemming from a
failure to comply with such laws or regulaons. Addionally, we are subject to the risk that a person could allege such
fraud or other misconduct, even if none occurred. If any such acons are instuted against us, and we are not success
-
ful in defending ourselves or asserng our rights, those acons could have a signicant impact on our business, results
of operaons and nancial condion, including the imposion of signicant civil, criminal and administrave penales,
damages, monetary nes, disgorgements, possible exclusion from parcipaon in Medicare, Medicaid and other U.S.
or internaonal healthcare programs, individual imprisonment, addional reporng requirements and oversight if
we become subject to a corporate integrity agreement or similar agreement to resolve allegaons of non-compliance
with these laws, other sancons, contractual damages, reputaonal harm, diminished prots and future earnings and
curtailment of our operaons, any of which could adversely aect our ability to operate our business and our results
of operaons. These risks may be parcularly heightened given our lack of experience with commercializaon and the
rapid growth of our sales and markeng funcon. Furthermore, due to the highly regulated environment in which we
operate and our heavy reliance on approval of our products by governmental enes and healthcare providers, reputa
-
onal risks related to the misconduct or other improper behavior as described above are likely to have a bigger impact
on us than on most companies operang in other industries.
2.4.4 Our high dependency on public perception of our products may negatively
influence the success of these products.
When and if any of our product candidates are approved for commercial sale, we will be highly dependent upon
consumer perceptions of the safety and quality of our products. We could be adversely affected if we were subject
to negative publicity or if any of our products or any similar products distributed by other companies prove to be, or
are asserted to be, harmful to patients. Because of our dependence upon consumer perception, any adverse publicity
associated with illness or other adverse effects resulting from patients’ use or misuse of our products or any similar
products distributed by other companies could have a material adverse impact on our business, prospects, financial
condition and results of operations.
Future adverse events in research into the cancer, inammaon and severe autoimmune diseases that we focus our re
-
search eorts on, or the biopharmaceucal industry more generally, could also result in greater governmental regulaon,
stricter labeling requirements and potenal regulatory delays in the tesng or approvals of our products. Any increased
scruny could delay or increase the costs of obtaining regulatory approval for our product candidates.
2.4.5 We face the risk of computer system failures, data leaks and cybercrimes.
Despite the implementation of security measures, our internal computer systems and those of our third-party service
providers are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and
telecommunication and electrical failure. Cyber-attacks are increasing in their frequency, sophistication and intensity,
and have become increasingly difficult to detect. Cyber-attacks have been threatened by state actors and private citi
-
zens as a method of potential international sabotage in furtherance of national or political goals. Cyber-attacks could
include the deployment of harmful malware, ransom-ware, denial-of-service attacks, social engineering and other
means to affect service reliability and threaten the confidentiality, integrity and availability of information. Cyber-at
-
tacks also could include phishing attempts or e-mail fraud to cause payments or information to be transmitted to an
unintended recipient.
Any system failure, accident or security breach that causes interrupons in our own or in third-party service vendors’
operaons could result in a material disrupon of our product development programs. For example, the loss of clinical
trial data from completed or future clinical trials could result in delays in our or our partners’ regulatory approval eorts
and signicantly increase our costs in order to recover or reproduce the lost data. To the extent that any disrupon or
security breach results in a loss or damage to our data or applicaons, or inappropriate disclosure of condenal or
proprietary informaon, we may incur liability, our product development programs and compeve posion may be
adversely aected and the further development of our product candidates may be delayed. If the integrity of our
cyber-security systems is breached, we may incur signicant eects such as remediaon expenses, lost revenues,
ligaon costs and increased insurance premiums and may also experience reputaonal damage and the erosion of
shareholder value. Furthermore, we may incur addional costs to remedy the damage caused by these disrupons or
security breaches. Like other companies, we have on occasion experienced, and will connue to experience, threats to
our data and systems, including malicious codes and viruses, phishing, business email compromise aacks, or other cy
-
ber-aacks. Whereas none of these instances had a material impact so far, the number and complexity of these threats
connue to increase over me. If a material breach of our informaon technology systems or those of our third party
service providers occurs, the market percepon of the eecveness of our security measures could be harmed and our
reputaon and credibility could be damaged.
We could be required to expend signicant amounts of money and other resources to respond to these threats or
breaches and to repair or replace informaon systems or networks, and could suer nancial loss or the loss of valuable
condenal informaon. In addion, we could be subject to regulatory acons and/or claims made by individuals and
groups in private ligaon involving privacy issues related to data collecon and use pracces and other data privacy laws
and regulaons, including claims for misuse or inappropriate disclosure of data, as well as unfair or decepve pracces.
Although we develop and maintain systems and controls designed to prevent these events from occurring, and we have
116 | Risk Factors Related to argenx’s Business and Industry Risk Factors Related to argenx’s Business and Industry | 117
PART II
a process to idenfy and migate threats, the development and maintenance of these systems, controls and processes is
costly and requires ongoing monitoring and updang as technologies change and eorts to overcome security measures
become increasingly sophiscated. This risk is further increased by the growing amount of data transferred by us be
-
tween Europe, China and the U.S. Moreover, despite our eorts, the possibility of these events occurring cannot be elim
-
inated enrely and there can be no assurance that any measures we take will prevent cyber-aacks or security breaches
that could adversely aect our business.
In order to successfully commercialize and market our products in the future we may need to implement addional en
-
terprise resource management systems which is a complex process that may cause us to face delays. We may also need
to implement computer systems such as addional global enterprise research systems (
ERP systems
) in which we have
limited experience and which may prove a complex process that could cause delays in our commercializaon process.
2.4.6 We may face service, manufacturing or supply chain failures or other
failures, business interruptions or other disasters.
Our products and product candidates are biologics and require processing steps that are more dicult than those re
-
quired for most chemical pharmaceucals. Accordingly, mulple steps are needed to control the manufacturing process
-
es. Problems with these manufacturing processes, such as capacity issues, or even minor deviaons from the normal
process or from the materials used in the manufacturing process, which may not be detectable by us in a mely manner,
could lead to manufacturing failures or product defects, resulng in lot failures, product recalls, product liability claims
and insucient inventory. Furthermore, our supply chain failures would create a risk of non-compliance toward partners
due to shortages, for example, if we are not able to deliver our product to our partner in China.
Also, certain raw materials or other products necessary for the manufacture and formulaon of our products and prod
-
uct candidates, some of which are dicult to source, are provided by single-source unaliated third-party suppliers. In
addion, we rely on certain third pares to perform lling, nishing, distribuon, laboratory tesng and other services
related to the manufacture of our products and product candidates, and to supply various raw materials and other
products. We would be unable to obtain these raw materials, other products, or services for an indeterminate period of
me if any of these third pares were to cease or interrupt producon or otherwise fail to supply these materials, prod
-
ucts, or services to us for any reason, including due to regulatory requirements or acons (including recalls), adverse
nancial developments at or aecng the supplier, failure by the supplier to comply with cGMPs, contaminaon, busi
-
ness interrupons, or labor shortages or disputes. Interrupons in the supply of these materials, products or services
may result from internaonal conict, trade disputes or economic sancons enacted by, or imposed on, the U.S., the
European Union or any other country. In any such circumstances, we may not be able to engage a backup or alternave
supplier or service provider in a mely manner or at all. This, in turn, could materially and adversely aect our ability to
supply products and product candidates, which could materially and adversely aect our business, nancial condion
and results of operaons.
Certain of the raw materials required in the manufacture and the formulaon of our products and product candidates
may be derived from biological sources, including mammalian ssues, bovine serum and human serum albumin. There
are certain European regulatory restricons on using these biological source materials. If there are changes in the
regulaon requirements, our clinical development or commercial acvies may be delayed or interrupted.
2.4.7 Failure to successfully identify, develop and commercialize additional
products or product candidates could impair our ability to grow.
Although a substanal amount of our eorts will focus on the connued preclinical and clinical tesng and potenal
approval of our product candidates in our current pipeline, a key element of our long-term growth strategy is to develop
and market additional products and product candidates. Because we have limited financial and managerial resources,
research programs to identify product candidates will require substantial additional technical, financial and human
resources, whether or not any product candidates are ultimately identified. The success of this strategy depends partly
upon our ability to identify, select and develop promising product candidates and products. Our technology platforms
may fail to discover and to generate additional product candidates that are suitable for further development. All prod
-
uct candidates are prone to risks of failure typical of pharmaceutical product development, including the possibility
that a product candidate may not be suitable for clinical development as a result of its harmful side effects, limited
efficacy or other characteristics that indicate that it is unlikely to be a product that will receive approval by the FDA,
EMA, PMDA and other comparable regulatory authorities and achieve market acceptance. If we do not successfully
develop and commercialize product candidates based upon our technological approach, we may not be able to obtain
product or collaboration revenues in future periods, which would adversely aect our business, prospects, nancial
condion and results of operaons.
Our long-term growth strategy to develop and market addional products and product candidates is heavily dependent
on precise, accurate and reliable scienc data to idenfy, select and develop promising pharmaceucal product candi
-
dates and products. Our business decisions may therefore be adversely inuenced by improper or fraudulent scienc
data sourced from third pares. Any irregularies in the scienc data used by us to determine our focus in research and
development of product candidates and products could have a material adverse eect on our business, prospects, nan
-
cial condion and results of operaons.
2.5 Risk Factors Related to argenx’s
Dependence on Third Parties
2.5.1 We rely, and expect to continue to rely, on third parties, including independent
clinical investigators and CROs, to conduct our preclinical studies and clinical
trials. If these third parties do not successfully carry out their contractual
duties or meet expected deadlines, we may not be able to obtain regulatory
approval for or commercialize our products and product candidates and our
business could be substantially harmed.
We have relied upon and plan to connue to rely upon third pares, including licensees, independent clinical invesga
-
tors and third-party CROs, to conduct our preclinical studies and clinical trials and to monitor and manage data for our
ongoing preclinical and clinical programs. We rely on these pares for execuon of our preclinical studies and clinical
trials, and control only certain aspects of their acvies. Nevertheless, we are responsible for ensuring that each of our
studies and trials is conducted in accordance with the applicable protocol, legal and regulatory requirements and scien
-
c standards, and our reliance on these third pares does not relieve us of our regulatory responsibilies. We and our
partners, third-party contractors and CROs are required to comply with GCP requirements, which are regulations and
guidelines enforced by the FDA, EMA, PMDA and comparable regulatory authorities for all of our products in clinical
development. Regulatory authorities enforce these GCPs through periodic inspections of trial sponsors, principal
investigators and trial sites. If we, our investigators or any of our CROs fail to comply with applicable GCPs, the clinical
data generated in our clinical trials may be deemed unreliable and the FDA, EMA, PMDA or comparable regulatory
authorities may require us to perform additional clinical trials before approving our marketing applications. Upon
inspection by a given regulatory authority, such regulatory authority may determine that our clinical trials do not fully
comply with GCP regulations. In addition, our clinical trials must be conducted with product produced under cGMP
regulations. Our failure to comply with these regulations may require us to repeat clinical trials, which would delay
the regulatory approval process.
Further, these invesgators and CROs are not our employees and we will not be able to control, other than by contract,
the amount of resources, including me, which they devote to our product candidates and clinical trials. If independent
invesgators or CROs fail to devote sucient resources to the development of our product candidates, or if their per
-
formance is substandard, it may delay or compromise the prospects for approval and commercializaon of any product
candidates that we develop. In addion, the use of third-party service providers requires us to disclose our proprietary
informaon to these pares, which could increase the risk that this informaon will be misappropriated.
118 | Risk Factors Related to argenx’s Business and Industry Risk Factors Related to argenx’s Dependence on Third Parties | 119
PART II
PART VII
Victor and Iris Yipp
Find Hope in MG*
Victor
& Iris
Victor Yipp and his wife, Iris, have been an unstoppable team
through the highs and lows of Victor’s MG diagnosis.
120 | Patient Story
Patient Story | 121
Can you describe the journey to
Victor’s MG diagnosis?
Iris: The enre year of 2017 led up to that MG diagnosis.
Victor started geng symptoms, one by one. The rst
one was an issue with swallowing.
Victor: The doctors thought it was a GI problem.
Iris: Yeah, but the GI treatments didn’t help. Then you
had double vision, so we went to the ophthalmologist.
Victor: They couldn’t nd anything wrong. But everything
was adding up: the swallowing issue, the double vision,
the inability to hold up my head…
Iris: We went to a bunch of doctors. But it was our own
doctor who eventually gured it out. He had started resear
-
ching MG aer we came in because he’d never seen it befo
-
re. But things went downhill quickly aer that—the diagno
-
sis and the hospitalizaon were only days apart. Victor was
diagnosed on Wednesday, November 1, 2017. By Sunday he
couldn’t drink water and needed to go to the hospital.
I was in the hospital for 32 days.
What happened after you got out of
the hospital? How did life change?
Iris: It took months for him to recover. With MG you can
look ne, but you may be unable to get through the day.
You have to rest. For instance, when he rst got out, we
got a temporary handicap parking permit. I always felt
like people were going to judge us.
Victor: Because I didn’t look like I needed handicap par
-
king. I think that’s the one thing many people misunders
-
tand. You look normal, but there’s a lot going on inside
that people can’t see.
How did you think MG would aect
your future?
Iris: I didn’t really think ahead, beyond dealing with
the symptoms right then. We did try some MG support
groups. And in one of them, there was someone in remis
-
sion for about 15 years. I thought, ‘Wow that would be
amazing.’ It gave us hope. I thought, ‘You can do it Victor.’
Patient
Story
PART II
*Paid contributor to MG United.
Our CROs have the right to terminate their agreements with us in the event of an uncured material breach. In addion,
some of our CROs have an ability to terminate their respecve agreements with us if it can be reasonably demonstrated
that the safety of the subjects parcipang in our clinical trials warrants such terminaon, if we make a general assign
-
ment for the benet of our creditors or if we are liquidated.
There is a limited number of third-party service providers that specialize or have the experse required to achieve our
business objecves. If any of our relaonships with these third-party CROs or clinical invesgators terminate, we may not
be able to enter into arrangements with alternave CROs or invesgators or to do so on commercially reasonable terms.
If CROs or clinical invesgators do not successfully carry out their contractual dues or obligaons or meet expected
deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to
the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be ex
-
tended, delayed or terminated and we may not be able to obtain regulatory approval for or successfully commercialize our
products and product candidates. As a result, our results of operaons and the commercial prospects for our products and
product candidates would be harmed, our costs could increase and our ability to generate revenues could be delayed.
Switching or adding additional CROs (or investigators) involves additional cost and requires management time and
focus. In addion, there is a natural transion period when a new CRO commences work. As a result, delays occur, which
can materially impact our ability to meet our desired clinical development melines. Though we carefully manage our
relaonships with our CROs, there can be no assurance that we will not encounter similar challenges or delays in the
future or that these delays or challenges will not have a material adverse impact on our business, nancial condion
and results of operaons.
2.5.2 We rely and will continue to rely on collaborative partners regarding the
development of our research programs and product candidates. If we fail
to enter into new strategic relationships our business, financial condition,
commercialization prospects and results of operations may be materially
adversely aected.
We are, and expect to connue to be, dependent on partnerships with partners relang to the development and com
-
mercializaon of our exisng and future research programs and product candidates. We currently have collaborave
research relaonships with various pharmaceucal companies such as AbbVie, Shire, Zai Lab and with various academic
and research instuons worldwide, for the development of product candidates resulng from such collaboraons. We
had, have and will connue to have discussions on potenal partnering opportunies with various pharmaceucal com
-
panies. If we fail to enter into or maintain collaboraons on reasonable terms or at all, our ability to develop our exisng
or future research programs and product candidates could be delayed, the commercial potenal of our products could
change and our costs of development and commercializaon could increase.
Our dependence on collaborave partners subjects us to a number of risks, including, but not limited to the terminaon
of the collaboraon agreements with all its consequences, disagreement on the interpretaon of contractual terms or no
adherence or uncertaines as part of the ongoing collaboraon. In addion, we may not be able to control our collabo
-
rave partners’ compliance with all applicable requirements for the commercializaon of our products, which could ad
-
versely aect such commercializing and the protability of such products (also see risk factor 2.4.3 “Our employees and
relevant third pares may engage in misconduct or other improper acvies, including non-compliance with regulatory
standards and requirements, which could have a material adverse eect on our business.”).
We face signicant compeon in seeking appropriate collaborave partners. Our ability to reach a denive agreement
for a partnership will depend, among other things, upon an assessment of the collaborator’s resources and experse,
the terms and condions of the proposed partnership and the proposed collaborator’s evaluaon of a number of factors.
These factors may include the design or results of clinical trials, the likelihood of regulatory approval, the potenal mar
-
ket for the subject product candidate, the costs and complexies of manufacturing and delivering such product candidate
to paents, the potenal of compeng products, the existence of uncertainty with respect to our ownership of tech
-
nology, which can exist if there is a challenge to such ownership regardless of the merits of the challenge and industry
and market condions generally. The collaborator may also consider alternave product candidates or technologies for
similar indicaons that may be available to collaborate on and whether such a partnership could be more aracve than
the one with us.
2.5.3 We rely on third parties to supply and manufacture our products and product
candidates, and we expect to continue to rely on third parties to manufacture
our products, if approved. The development of such products and product
candidates and the commercialization of any products, when and if approved,
could be stopped, delayed or made less profitable if any such third party fails
to provide us with sucient quantities of product candidates or products or
fails to do so at acceptable quality levels or prices or fails to maintain or
achieve satisfactory regulatory compliance.
We do not currently have, nor do we plan to acquire, the infrastructure or capability internally to manufacture our prod
-
ucts or product candidates for use in the conduct of our clinical studies or for commercial supply, when and if our products
are approved. Instead, we rely on, and expect to connue to rely on contract manufacturing organizaons (
CMOs
). We are forced to rely on limited and single sources of manufacturing. We currently rely mainly on Lonza for the manufacturing of
the drug substance of all our products. Furthermore, we use Veer Pharma Internaonal GmbH’s ll and nish services for
our products. Reliance on third-party providers may expose us to more risk than if we were to manufacture our products
and product candidates ourselves. We do not control the manufacturing processes of the CMOs we contract with and are
dependent on those third pares for the producon of our products and product candidates in accordance with relevant
regulaons (such as cGMP), which includes, among other things, quality control, quality assurance and the maintenance of
records and documentaon.
If we were to experience an unexpected loss of supply of or if any supplier was unable to meet our demand for any of our
products and product candidates, we could experience delays in our research or planned clinical studies or commercializa
-
on. We could be unable to nd alternave suppliers of acceptable quality, in the appropriate volumes and at an acceptable
cost. Moreover, our suppliers are oen subject to strict manufacturing requirements and rigorous tesng requirements,
which could limit or delay producon. The long transion periods necessary to switch manufacturers and suppliers, if
necessary, would signicantly delay our clinical studies and the commercializaon of our products, if approved, which would
materially adversely aect our business, nancial condion and results of operaon.
We and our third-party suppliers may also be subject to audits by the FDA, EMA, PMDA or other comparable regulatory
authories. If any of our third-party suppliers fails to comply with cGMP or other applicable manufacturing regulaons,
our ability to develop and commercialize the products could suer signicant interrupons. We face risks inherent in
relying on a single CMO, as any disrupon, such as a re, pandemic, natural hazards or vandalism at the CMO could
signicantly interrupt our manufacturing capability. Alternave producon plans in place or disaster-recovery facilies
available to us may not be sucient. In case of a disrupon, we may have to establish addional alternave manufac
-
turing sources. This would require substanal investment on our part, which we may not be able to obtain on commer
-
cially acceptable terms or at all. Addionally, we may experience signicant manufacturing delays as we build or locate
replacement facilies and seek and obtain necessary regulatory approvals. If this occurs, we will be unable to sasfy
manufacturing needs on a mely basis, if at all. Also, operang any new facilies may be more expensive than operang
our current facilies. Further, business interrupon insurance may not adequately compensate us for any losses that may
occur, and we would have to bear the addional cost of any disrupon. For these reasons, a signicant disrupve event
of the manufacturing facility could have drasc consequences, including placing our nancial stability at risk.
The manufacturing of all of our products and product candidates requires using cells which are stored in a cell bank.
We have one master cell bank for each product manufactured in accordance with cGMP. Half of each master cell bank
is stored at a separate site so that in case of a catastrophic event at one site we believe sucient vials of the master
cell banks are le at the alternave storage site to connue manufacturing. We believe sucient working cell banks
could be produced from the vials of the master cell bank stored at a given site to assure product supply for the future.
However, it is possible that we could lose mulple cell banks and have our manufacturing signicantly impacted by the
need to replace these cell banks, which could materially adversely aect our business, prospects, nancial condion
and results of operaons.
122 | Risk Factors Related to argenx’s Dependence on Third Parties Risk Factors Related to argenx’s Dependence on Third Parties | 123
PART II
2.5.4 Accuracy and timing of our financial reporting is partially dependent on
information received from third party partners, which we do not control.
We have collaborated, and plan to connue to collaborate, with third pares on product candidates that we believe have
promising ulity in disease areas or paent populaons that are beer served by resources of larger biopharmaceucal
companies. As part of some of these collaboraons, our collaboraon partners are responsible for providing us with
nancial informaon regarding specic projects, including funds spent, liabilies incurred and expected future costs, on
which we rely for our own nancial reporng. If our collaboraon partners fail to provide us with the necessary nancial
informaon within the agreed upon meframes, or if such nancial informaon proves parally inaccurate, this is likely
to impact the accuracy of our own nancial reporng. Our reliance on nancial informaon received from our collab
-
oraon partners may impact our own internal and external nancial reporng and any delay in the provision of such
nancial informaon to us or any failure by us to idenfy mistakes in the nancial informaon provided to us may cause
our own nancial statements to be parally inaccurate. Any inaccuracy in our nancial reporng could cause investors to
lose condence in our nancial reporng. This in turn may lead to reputaonal damage and/or aect our ability to, and
the terms on which we may, obtain future (equity) nancing which may harm our business.
2.6 Risk Factors Related to argenx’s
Intellectual Property
2.6.1 We rely on patents and other intellectual property rights to protect our prod-
ucts and product candidates and platform technologies. Failure to enforce or
protect these rights adequately could harm our ability to compete and impair
our business.
Our commercial success depends in part on obtaining and maintaining patents and other forms of intellectual proper
-
ty rights for our products and product candidates, methods used to manufacture those products and the methods for
treang paents using those products, or on licensing in such rights. Specically, we are materially dependent on patent
and other proprietary protecon related to our core plaorm technologies and our products and product candidates.
Failure to protect or to obtain, maintain or extend adequate patent and other intellectual property rights could materially
adversely aect our ability to develop and market our products and product candidates. The enforcement, defense and
maintenance of such patents and other intellectual property rights may be challenging and costly.
We cannot be certain that patents will be issued or granted with respect to applicaons that are currently pending. As a
biopharmaceucal company our patent posion is uncertain because it involves complex legal and factual consideraons.
The standards applied by the European Patent Oce, the U.S. Patent and Trademark Oce (
USPTO
) and foreign patent oces in granng patents are not always applied uniformly or predictably. For example, there is no uniform worldwide
policy regarding patentable subject maer or the scope of claims allowable in biopharmaceucal patents. Consequently,
patents may not issue from our pending patent applicaons. As such, we do not know the degree of future protecon
that we will have on our proprietary products and technology. The scope of patent protecon that the European Patent
Oce and the USPTO will grant with respect to the anbodies in our anbodies product pipeline is uncertain. It is pos
-
sible that the European Patent Oce and the USPTO will not allow broad anbody claims that cover anbodies closely
related to our products and product candidates as well as the specic anbody. As a result, upon receipt of EMA or FDA
approval, competors may be free to market anbodies almost idencal to ours, including biosimilar anbodies, thereby
decreasing our market potenal. However, a competor cannot submit to the FDA an applicaon for a biosimilar product
based on one of our products unl four years following the date of approval of our “reference product,” and the FDA may
not approve such a biosimilar product unl twelve years from the date on which the reference product was approved.
The patent prosecuon process is expensive and me-consuming, and we and our current or future licensors, licensees
or collaboraon partners may not be able to prepare, le and prosecute all necessary or desirable patent applicaons at
a reasonable cost or in a mely manner. It is also possible that we or our licensors, licensees or collaboraon partners
will fail to idenfy patentable aspects of invenons made in the course of development and commercializaon acvi
-
es before it is too late to obtain patent protecon on them. Further, the issuance, scope, validity, enforceability and
commercial value of our and our current or future licensors’, licensees’ or collaboraon partners’ patent rights are highly
uncertain. Our and our licensors’ pending and future patent applicaons may not result in patents being issued that pro
-
tect our technology or products, in whole or in part, or that eecvely prevent others from commercializing compeve
technologies and products. Moreover, in some circumstances, we may not have the right to control the preparaon, ling
and prosecuon of patent applicaons, or to maintain the patents, or we may need to enter into new license or royalty
agreements, covering technology that we license from or license to third pares or have developed in collaboraon with
our collaboraon partners and are reliant on patent procurement acvies of our licensors, licensees or collaboraon
partners. Therefore, these patents and applicaons may not be prosecuted and enforced in a manner consistent with
the best interests of our business. If our current or future licensors, licensees or collaboraon partners fail to establish,
maintain or protect such patents and other intellectual property rights, such rights may be reduced or eliminated. If
our licensors, licensees or collaboraon partners are not fully cooperave or disagree with us as to the prosecuon,
maintenance or enforcement of any patent rights, such patent rights could be compromised. The patent examinaon
process may require us or our licensors, licensees or collaboraon partners to narrow the scope of the claims of our or
our licensors’, licensees’ or collaboraon partners’ pending and future patent applicaons, which may limit the scope
of patent protecon that may be obtained. We cannot be assured that all of the potenally relevant prior art relang to
our patents and patent applicaons has been found. If such prior art exists, it can invalidate a patent or prevent a patent
from issuing from a pending patent applicaon. Even if patents do issue and even if such patents cover our products and
product candidates, third pares may iniate an opposion, interference, re-examinaon, post-grant review, inter panes
review, nullicaon or derivaon acon in court or before patent oces, or similar proceedings challenging the validity,
enforceability or scope of such patents, which may result in the patent claims being narrowed or invalidated. Our and
our licensors’, licensees’ or collaboraon partners’ patent applicaons cannot be enforced against third pares praccing
the technology claimed in such applicaons unless and unl a patent issue from such applicaons, and then only to the
extent the issued claims cover the technology.
Because patent applicaons are condenal for a period of me aer ling, and some remain so unl issued, we cannot
be certain that we or our licensors were the rst to le any patent applicaon related to a product and product candi
-
date. Furthermore, as to the U.S., if third pares have led such patent applicaons on or before March 15, 2013, an
interference proceeding can be iniated by such third pares to determine who was the rst to invent any of the subject
maer covered by the patent claims of our applicaons. If third pares have led such applicaons aer March 15,
2013, a derivaon proceeding can be iniated by such third pares to determine whether our invenon was derived
from theirs. Even where we have a valid and enforceable patent, we may not be able to exclude others from praccing
our invenon where the other party can show that they used the invenon in commerce before our ling date, or if the
other party is able to obtain a compulsory license. Any of the aforemenoned situaons could cause harm to our ability
to protect our intellectual property, which in turn would allow competors to market comparable products which could
materially adversely aect our compeve posion and as such our business, nancial condion and results of operaon.
2.6.2 Issued patents could be found invalid or unenforceable if challenged in court.
To protect our compeve posion, we may from me to me need to resort to ligaon in order to enforce or defend
any patents or other intellectual property rights owned by or licensed to us, or to determine or challenge the scope or
validity of patents or other intellectual property rights of third pares. Enforcement of intellectual property rights is
dicult, unpredictable and expensive, and many of our or our licensors’ or collaboraon partners’ adversaries in these
proceedings may have the ability to dedicate substanally greater resources to prosecung these legal acons than we
or our licensors or collaboraon partners can. Accordingly, despite our or our licensors’ or collaboraon partners’ eorts,
we or our licensors or collaboraon partners may not prevent third pares from infringing upon or misappropriang
intellectual property rights we own or control, parcularly in countries where the laws may not protect those rights as
fully as in the European Union and the U.S. We may fail in enforcing our rights, in which case our competors may be
permied to use our technology without being required to pay us any license fees and/or royales. In addion, liga
-
124 | Risk Factors Related to argenx’s Intellectual Property Risk Factors Related to argenx’s Intellectual Property | 125
PART II
on involving our patents carries the risk that one or more of our patents will be held invalid (in whole or in part, on a
claim-by-claim basis) or held unenforceable. Such an adverse court ruling could allow third pares to commercialize our
products or use our SIMPLE Anbody™, NHance® and ABDEG™ plaorm technologies, and then compete directly with us,
without payment to us.
If we were to iniate legal proceedings against a third party to enforce a patent covering one of our products, the defen
-
dant could counterclaim that our patent is invalid or unenforceable. In patent ligaon in the U.S. or in Europe, defen
-
dant counterclaims alleging invalidity or unenforceability are commonplace. A claim for a validity challenge may be based
on failure to meet any of several statutory requirements, for example, lack of novelty, obviousness or non-enablement. A
claim for unenforceability could involve an allegaon that someone connected with prosecuon of the patent withheld
relevant informaon from the European Patent Oce or the USPTO or made a misleading statement, during prosecuon.
The outcome following legal asserons of invalidity and unenforceability during patent ligaon is unpredictable. With
respect to the validity queson, for example, we cannot be certain that there is no invalidang prior art, of which we and
the patent examiner were unaware during prosecuon. If a defendant were to prevail on a legal asseron of invalidity or
unenforceability, we would lose at least part, and perhaps all, of the patent protecon on one or more of our products or
certain aspects of our SIMPLE Anbody™, NHance® and ABDEG™ plaorm technologies. Such a loss of patent protecon
could have a material adverse impact on our business. Further, ligaon could result in substanal costs and diversion of
management resources, regardless of the outcome, and this could harm our business and nancial results. Patents and
other intellectual property rights also will not protect our technology if competors design around our protected tech
-
nology without infringing our patents or other intellectual property rights.
2.6.3 Intellectual property rights of third parties could adversely aect our ability to
commercialize our products and product candidates and may harm our compet-
itive position.
Our competitive position may suffer if patents issued to third parties or other third-party intellectual property rights
cover our products or elements thereof, our manufacture or uses relevant to our development plans, the targets of
our products and product candidates, or other attributes of our products and product candidates or our technology.
In such cases, we may not be in a position to develop or commercialize products or product candidates unless we
successfully pursue litigation to nullify or invalidate the third-party intellectual property right concerned, or enter
into a license agreement with the intellectual property right holder, if available on commercially reasonable terms.
We are aware of certain U.S. issued patents held by third parties that some may argue cover certain aspects of our
product candidates, including cusatuzumab. One such third party patent family of potential relevance to cusatuzum
-
ab is scheduled to expire in 2028. In the event that a patent has not expired at the time of approval of such product
candidate and the patent owner were to bring an infringement action against us, we may have to argue that our
product, its manufacture or use does not infringe a valid claim of the patent in question. Alternatively, if we were
to challenge the validity of any issued U.S. patent in court, we would need to overcome a statutory presumption of
validity that attaches to every U.S. patent. This means that in order to prevail, we would need to present clear and
convincing evidence as to the invalidity of the patent’s claims. There is no assurance that a court would find in our
favor on questions of infringement or validity. In the event that a patent is successfully asserted against us such that
the patent is found to be valid and enforceable and infringed by our product, unless we obtain a license to such a
patent, which may not be available on commercially reasonable terms or at all, we could be prevented from continu
-
ing to develop or commercialize our product. Similarly, the targets for certain of our products and product candidates
have also been the subject of research by other companies, which have filed patent applications or have patents on
aspects of the targets or their uses. There can be no assurance any such patents will not be asserted against us or
that we will not need to seek licenses from such third parties. We may not be able to secure such licenses on accept
-
able terms, if at all, and any such litigation would be costly and time-consuming.
It is also possible that we are unaware to relevant patents or applicaons. For example, certain U.S. applicaons led
aer November 29, 2000 that will not be led outside the U.S. may remain condenal unl patents issue. In general,
patent applicaons in the U.S. and elsewhere are published approximately 18 months aer the earliest ling from which
priority is claimed, with such earliest ling date being commonly referred to as the priority date. Therefore, patent
applicaons covering our products, product candidates or plaorm technology could have been led by others without
our knowledge. Furthermore, we operate in a highly compeve eld, and given our limited resources, it is unreasonable
to monitor all patent applicaons purporng to gain broad coverage in the areas in which we are acve. Addionally,
pending patent applicaons which have been published can, subject to certain limitaons, be later amended in a manner
that could cover our plaorm technologies, our products or the use of our products.
Third-party intellectual property right holders, including our competors, may acvely bring infringement claims against
us. The granng of orphan drug status in respect of any of our product candidates does not guarantee our freedom to
operate and is separate from our risk of possible infringement of third pares’ intellectual property rights. We may not
be able to successfully sele or otherwise resolve such infringement claims. If we are unable to successfully sele future
claims on terms acceptable to us, we may be required to engage or connue costly, unpredictable and me-consuming
ligaon and may be prevented from or experience substanal delays in markeng our products.
If we fail in any such dispute, in addion to being forced to pay damages, we or our licensees may be temporarily or per
-
manently prohibited from commercializing any of our products and product candidates that are held to be infringing. We
might, if possible, also be forced to redesign products and product candidates so that we no longer infringe the third-party
intellectual property rights. We may be required to seek a license to any such technology that we are found to infringe,
which license may not be available on commercially reasonable terms, or at all. Even if we or our licensors or collaboraon
partners obtain a license, it may be non-exclusive (for example, the POTELLIGENT® plaorm), thereby giving our competors
access to the same technologies licensed to us or our licensors or collaboraon partners. In addion, we could be found lia
-
ble for monetary damages, including treble damages and aorneys’ fees, if we are found to have willfully infringed a patent.
Any of these events, even if we were to ulmately prevail, could require us to divert substanal nancial and manage
-
ment resources that we would otherwise be able to devote to our business.
In addion, if the breadth or strength of protecon provided by our or our licensors’ or collaboraon partners’ patents
and patent applicaons is threatened, it could dissuade companies from collaborang with us to license, develop or
commercialize current or future products and product candidates. Furthermore, because of the substanal amount of
discovery required in connecon with intellectual property ligaon, there is a risk that some of our condenal informa
-
on could be compromised by disclosure during this type of ligaon.
2.6.4 Our ability to compete may be adversely aected if we are unsuccessful
in defending against any claims by competitors or others that we are
infringing upon their intellectual property rights.
The various markets in which we operate or plan to operate are subject to frequent and extensive ligaon regarding
patents and other intellectual property rights. In addion, companies producing therapeucs to treat and potenally
cure cancer have employed intellectual property ligaon as a means to gain an advantage over their competors. As a
result, we may be required to defend against claims of intellectual property infringement that may be asserted against us
and, if the outcome of any such ligaon is adverse to us, it may aect our ability to compete eecvely.
Our involvement in ligaon, and in, e.g., any interference, derivaon, reexaminaon,
inter partes
review, opposion or post-grant proceedings or other intellectual property proceedings inside and outside of the European Union or the U.S.
may divert management me from focusing on business operaons, could cause us to spend signicant amounts of mon
-
ey and may have no guarantee of success. Potenal intellectual property ligaon could also, amongst other things, force
us to stop selling, incorporang, manufacturing or using certain of our products, to obtain a license to sell or use certain
technology from a third party asserng its intellectual property rights, to redesign certain products or processes that use
any allegedly infringing or misappropriated technology or pay damages, including the possibility of treble damages in a
patent case if a court nds us to have willfully infringed certain intellectual property rights, which may result in signicant
cost and/or delay to us. Moreover, certain licenses may not be available on reasonable terms, or at all, or may be non-ex
-
clusive thereby giving our competors access to the same technologies licensed to us and redesigning certain products or
processes could be technically infeasible.
126 | Risk Factors Related to argenx’s Intellectual Property Risk Factors Related to argenx’s Intellectual Property | 127
PART II
2.6.5 Intellectual property litigation could cause us to spend substantial
resources and distract our personnel from their normal responsibilities.
Even if resolved in our favor, ligaon or other legal proceedings relang to intellectual property claims may cause us to
incur signicant expenses and could distract our technical and management personnel from their normal responsibilies.
In addion, there could be public announcements of the results of hearings, moons or other interim proceedings or
developments and if securies analysts or investors perceive these results to be negave, this may negavely impact us.
Such ligaon or proceedings could substanally increase our operang losses and reduce our resources available for
development acvies. We may not have sucient nancial or other resources to adequately conduct such ligaon or
proceedings. Some of our competors may be able to sustain the costs of such ligaon or proceedings more eecvely
than we can because of their substanally greater nancial resources. Uncertaines resulng from the iniaon and
connuaon of patent ligaon or other proceedings could have a material adverse eect on our ability to compete in
the marketplace.
Many of our consultants and employees, including our senior management, were previously employed at other biotech
-
nology or pharmaceucal companies, including our competors or potenal competors. Some of these consultants and
employees executed proprietary rights, non-disclosure and non-compeon agreements in connecon with such previ
-
ous employment. Although we try to ensure that our consultants and employees do not use the proprietary informaon
or know-how of others in their work for us, we may be subject to claims that we or these consultants and employees
have used or disclosed condenal informaon or intellectual property, including trade secrets or other proprietary in
-
formaon, of any such consultant’s or employee’s former employer, or have breached their non-compeon agreement.
Ligaon may be necessary to defend against these claims.
If we fail in prosecung or defending any such claims, in addion to paying monetary damages, we may lose valuable
intellectual property rights or personnel or sustain damages. Such intellectual property rights could be awarded to a third
party, and we could be required to obtain a license from such third party to commercialize our technology or products.
Such a license may not be available on commercially reasonable terms or at all. Even if we successfully prosecute or
defend against such claims, ligaon could result in substanal costs and distract management.
2.6.6 We may not be successful in obtaining or maintaining necessary rights to our
products and product candidates through acquisitions and in-licenses.
Because our programs may require the use of proprietary rights held by third pares, the growth of our business will likely
depend in part on our ability to acquire, in-license, maintain or use these proprietary rights. We may be unable to acquire or
in-license any composions, methods of use, processes, or other third-party intellectual property rights from third pares
that we idenfy as necessary for our product candidates. The licensing and acquision of third-party intellectual proper
-
ty rights is a compeve area, and a number of more established companies may pursue strategies to license or acquire
third-party intellectual property rights that we may consider aracve. These established companies may have a compe
-
ve advantage over us due to their size, cash resources and greater clinical development and commercializaon capabilies.
For example, we somemes collaborate with U.S. and non-U.S. academic instuons to accelerate our preclinical research
or development under wrien agreements with these instuons. Typically, these instuons provide us with an opon
to negoate a license to any of the instuon’s rights in technology resulng from the collaboraon. Regardless of such
opon, we may be unable to negoate a license within the specied meframe or under terms that are acceptable to us.
If we are unable to do so, the instuon may oer the intellectual property rights to other pares, potenally blocking
our ability to pursue our applicable product candidate or program.
In addion, companies that perceive us to be a competor may be unwilling to assign or license rights to us. We also
may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an
appropriate return on our investment. If we are unable to successfully obtain a license to third-party intellectual property
rights necessary for the development of a product candidate or program, we may have to abandon development of that
product candidate or program and our business and nancial condion could suer.
2.6.7 If we fail to comply with our obligations under the agreements pursuant to
which we license intellectual property rights from third parties, or otherwise
experience disruptions to our business relationships with our licensors, we
could lose the rights to intellectual property that are important to our business.
We are a party to license agreements under which we are granted rights to intellectual property that are important
to our business and we expect that we may need to enter into additional license agreements in the future. Existing
license agreements impose, and we expect that future license agreements will impose, various development obliga
-
tions, payment of royalties and fees based on achieving certain milestones, as well as other obligations. If we fail to
comply with our obligations under these agreements, the licensor may have the right to terminate the license. The
termination of any license agreements or failure to adequately preserve such license agreements could prevent us
from commercializing products or product candidates covered by the licensed intellectual property. Several of our
existing license agreements are sub-licenses from third parties which are not the original licensor of the intellectual
property at issue. Under these agreements, we must rely on our licensor to comply with its obligations under the
primary license agreements under which such third party obtained rights in the applicable intellectual property, where
we may have no relationship with the original licensor of such rights. If the licensors fail to comply with their obliga
-
tions under these upstream license agreements, the original third-party licensor may have the right to terminate the
original license, which may terminate the sublicense. If this were to occur, we would no longer have rights to the ap
-
plicable intellectual property and, in the case of a sublicense, if we were not able to secure our own direct license with
the owner of the relevant rights, which it may not be able to do at a reasonable cost or on reasonable terms, it may
adversely affect our ability to continue to develop and commercialize the products and product candidates incorporat
-
ing the relevant intellectual property.
Disputes may arise regarding intellectual property subject to a licensing agreement, including:
• the scope of rights granted under the license agreement and other interpretaon-related issues;
• the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject
to the licensing agreement;
• the sublicensing of patent and other rights under any collaboraon relaonships we might enter into in the future;
• our diligence obligaons under the license agreement and what acvies sasfy those diligence obligaons;
• the ownership of invenons and know-how resulng from the joint creaon or use of intellectual property by our
licensors and us and our partners; and
• the priority of invenon of patented technology.
If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing
arrangements on acceptable terms, we may be unable to successfully develop and commercialize the aected products and
product candidates.
2.6.8 If our trademarks and trade names are not adequately protected, then
we may not be able to build name recognition in our markets of interest
and our business may be adversely aected.
Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented or declared
generic or determined to be infringing on other marks. We may not be able to protect our rights to these trademarks
and trade names, which we need to build name recognition by potential partners or customers in our markets of in
-
terest. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names,
then we may not be able to compete effectively and our business may be adversely affected. If other entities use
trademarks similar to ours in different jurisdictions, or have senior rights to ours, it could interfere with our use of
our current trademarks throughout the world.
128 | Risk Factors Related to argenx’s Intellectual Property Risk Factors Related to argenx’s Intellectual Property | 129
PART II
2.6.9 If we do not obtain protection under the Hatch-Waxman Amendments and sim-
ilar non-U.S. legislation for extending the term of patents covering each of our
products and product candidates, our business may be materially harmed.
Patents have a limited duraon. In the U.S., if all maintenance fees are mely paid, the natural expiraon of a patent is gen
-
erally 20 years from its earliest U.S. non-provisional ling date. Various extensions may be available, but the life of a patent,
and the protecon it aords, is limited. Even if patents covering our products and product candidates, their manufacture, or
use are obtained, once the patent life has expired, we may be open to compeon from compeve medicaons, including
biosimilar medicaons. Given the amount of me required for the development, tesng and regulatory review of new prod
-
uct candidates, patents protecng such candidates might expire before or shortly aer such candidates are commercialized.
As a result, our owned and licensed patent porolio may not provide us with sucient rights to exclude others from com
-
mercializing products similar or idencal to ours.
Depending upon the ming, duraon and condions of FDA markeng approval of our product candidates, one or more of
our U.S. patents may be eligible for limited patent term extension under the Drug Price Compeon and Patent Term Resto
-
raon Act of 1984 (the
Hatch-Waxman Act
) and similar legislaon in the European Union. The Hatch-Waxman Act permits
a patent term extension of up to ve years for a patent covering an approved product as compensaon for eecve patent
term lost during product development and the FDA regulatory review process. The patent term extension cannot extend
the remaining term of a patent beyond a total of 14 years from the date of product approval, and only one patent applica
-
ble to an approved drug may be extended. However, we may not receive an extension if we fail to apply within applicable
deadlines, fail to apply prior to expiraon of relevant patents or otherwise fail to sasfy applicable requirements. Moreover,
the length of the extension could be less than we request. If we are unable to obtain patent term extension or the term of
any such extension is less than we request, the period during which we can enforce our patent rights for that product will be
shortened and our competors may obtain approval to market compeng products sooner than we expect. As a result, our
revenue from applicable products could be reduced, possibly materially.
2.6.10 We enjoy only limited geographical protection with respect to certain
patents and may face diculties in certain jurisdictions, which may
diminish the value of intellectual property rights in those jurisdictions.
We oen le our rst patent applicaon (i.e., priority ling) at the UK Intellectual Property Oce, the European Patent
Oce or the USPTO. Internaonal applicaons under the Patent Cooperaon Treaty (
PCT
) are usually led within twelve months aer the priority ling. Based on the PCT ling, naonal and regional patent applicaons may be led in addi
-
onal jurisdicons where we believe our products and product candidates may be marketed. We have so far not led for
patent protecon in all naonal and regional jurisdicons where such protecon may be available. In addion, we may
decide to abandon naonal and regional patent applicaons before grant. Finally, the grant proceeding of each naonal/
regional patent is an independent proceeding which may lead to situaons in which applicaons might in some jurisdic
-
ons be refused by the relevant patent oces, while granted by others. It is also quite common that depending on the
country, the scope of patent protecon may vary for the same products or product candidate or technology.
Competors may use our and our licensors’ or collaboraon partners’ technologies in jurisdicons where we have not
obtained patent protecon to develop their own products and, further, may export otherwise infringing products to
territories where we and our licensors or collaboraon partners have patent protecon, but enforcement is not as strong
as that in the U.S. and the European Union. These products may compete with our products and product candidates,
and our and our licensors’ or collaboraon partners’ patents or other intellectual property rights may not be eecve or
sucient to prevent them from compeng.
The laws of some jurisdicons do not protect intellectual property rights to the same extent as the laws in the U.S. and
the European Union, and companies have encountered signicant dicules in protecng and defending such rights in
such jurisdicons. If we or our licensors encounter dicules in protecng, or are otherwise precluded from eecvely
protecng, the intellectual property rights important for our business in such jurisdicons, the value of these rights may
be diminished and we may face addional compeon from others in those jurisdicons.
Some countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third par
-
es. In addion, some countries limit the enforceability of patents against government agencies or government contractors. In
these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent. If we
or any of our licensors is forced to grant a license to third pares with respect to any patents relevant to our business, our com
-
peve posion may be impaired and our business, results of operaons and nancial condion may be adversely aected.
Proceedings to enforce our and our licensors’ or collaboraon partners’ patent rights in foreign jurisdicons could result
in substanal costs and divert our and our licensors’ or collaboraon partners’ eorts and aenon from other aspects of
our business, could put our and our licensors’ or collaboraon partners’ patents at risk of being invalidated or interpreted
narrowly and our and our licensors’ or collaboraon partners’ patent applicaons at risk of not issuing and could provoke
third pares to assert claims against us or our licensors or collaboraon partners. We or our licensors or collaboraon
partners may not prevail in any lawsuits that we or our licensors or collaboraon partners iniate and the damages or
other remedies awarded, if any, may not be commercially meaningful.
2.6.11 Intellectual property rights do not necessarily address all potential threats to
our competitive advantage and changes in patent laws or patent jurisprudence
could diminish the value of patents in general, thereby impairing our ability to
protect our products.
The America Invents Act (
AIA
) has been enacted in the U.S., resulng in signicant changes to the U.S. patent system. An important change introduced by the AIA is that, as of March 16, 2013, the U.S. transioned to a “rst-to-le” system
for deciding which party should be granted a patent when two or more patent applicaons are led by dierent pares
claiming the same invenon. A third party that les a patent applicaon in the USPTO aer that date but before us could
therefore be awarded a patent covering an invenon of ours even if we had made the invenon before it was made by
the third party. This will require us to be cognizant going forward of the me from invenon to ling of a patent applica
-
on, but circumstances could prevent us from promptly ling patent applicaons on our invenons.
Among some of the other changes introduced by the AIA are changes that limit where a patentee may le a patent in
-
fringement suit and providing opportunies for third pares to challenge any issued patent in the USPTO. This applies to
all of our U.S. patents, even those issued before March 16, 2013. Because of a lower evidenary standard in USPTO pro
-
ceedings compared to the evidenary standard in U.S. federal courts necessary to invalidate a patent claim, a third party
could potenally provide evidence in a USPTO proceeding sucient for the USPTO to hold a claim invalid even though the
same evidence would be insucient to invalidate the claim if rst presented in a district court acon. Accordingly, a third
party may aempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if
rst challenged by the third party as a defendant in a district court acon. The AIA and its implementaon could increase
the uncertaines and costs surrounding the prosecuon of our patent applicaons and the enforcement or defense of
our issued patents.
Addionally, the U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of pat
-
ent protecon available in certain circumstances or weakening the rights of patent owners in certain situaons. In addion
to increasing uncertainty with regard to our ability to obtain patents in the future, this combinaon of events has created
uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the federal
courts and the USPTO, the laws and regulaons governing patents could change in unpredictable ways that could weaken
our ability to obtain new patents or to enforce our exisng patents and patents that we might obtain in the future.
Any inability of us to protect our compeve advantage with regard to any of our products and product candidates may
prevent us from successfully monezing such products and product candidate and this could materially adversely aect
our business, prospects, nancial condion and results of operaons.
130 | Risk Factors Related to argenx’s Intellectual Property Risk Factors Related to argenx’s Intellectual Property | 131
PART II
2.6.12 Obtaining and maintaining our patent protection depends on
compliance with various procedural, document submission, fee payment
and other requirements imposed by governmental patent agencies, and
our patent protection could be reduced or eliminated for non-compliance
with these requirements.
Periodic maintenance and annuity fees on any issued patent are due to be paid to the USPTO, the European Patent Oce
and foreign patent agencies in several stages over the lifeme of the patent. The USPTO, the European Patent Oce and
various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee pay
-
ment and other similar provisions during the patent applicaon process. While an inadvertent lapse can in many cases be
cured by payment of a late fee or by other means in accordance with the applicable rules, there are situaons in which
noncompliance can result in abandonment or lapse of the patent or patent applicaon, resulng in paral or complete
loss of patent rights in the relevant jurisdicon. Non-compliance events that could result in abandonment or lapse of a
patent or patent applicaon include failure to respond to ocial acons within prescribed me limits, non-payment of
fees and failure to properly legalize and submit formal documents. If we or our licensors or collaboraon partners fail to
maintain the patents and patent applicaons covering our products and product candidates, our competors might be
able to enter the market, which would have an adverse eect on our business.
2.6.13 Our trade secrets may be misappropriated or disclosed, and
confidentiality agreements with employees, consultants, advisors
and potential collaborators may not adequately prevent disclosure
of trade secrets and protect other proprietary information.
In addion to patent protecon, we also rely on trade secret protecon for our proprietary informaon that is not
amenable to, or that we do not consider appropriate for, patent protecon, including, for example, certain aspects of our
llama immunizaon and anbody anity maturaon approaches. However, trade secrets are dicult to protect, and we
have limited control over the protecon of trade secrets used by our licensors, collaborators and suppliers.
To protect this type of informaon against disclosure or appropriaon by competors, our usual pracce is to require our
employees, consultants, advisors and potenal collaborators to enter into condenality agreements. Moreover, we put
in place appropriate procedures to idenfy condenal material and restrict access to documentaon. However, current
or former employees, consultants, advisers and potenal collaborators may unintenonally or willfully disclose our
condenal informaon to competors. We have entered into, and may in the future enter into addional, collaboraons
with our competors, and condenality agreements may not provide an adequate remedy in the event of unauthorized
disclosure of condenal informaon. In addion, the need to share trade secrets and other condenal informaon
increases the risk that such trade secrets become known to our competors, are inadvertently incorporated into the
technology of others, or are disclosed or used in violaon of these agreements.
Enforcing a claim that a third party obtained illegally and is using trade secrets is expensive, me consuming and the
outcome is unpredictable, and the enforceability of condenality agreements may vary from jurisdicon to jurisdicon.
Moreover, if any of our trade secrets were to be lawfully obtained or independently developed by a competor or other
third party, we would have no right to prevent them from using that technology or informaon to compete with us.
2.7 Risk Factors Related to argenx’s
Organization and Operations
2.7.1 Our future growth and ability to compete depends on retaining our
key personnel and recruiting additional qualified personnel.
Our success depends upon the connued contribuons of our key management, scienc and technical personnel, many
of whom have been instrumental for us and have substanal experience with our therapies and related technologies.
These key management individuals include the members of our Board of Directors and senior management team.
The loss of key managers and senior sciensts could delay our research and development acvies. In addion, our abili
-
ty to compete in the highly compeve biotechnology and pharmaceucal industries depends upon our ability to aract
and retain highly qualied management, scienc and medical personnel. Many other biotechnology and pharmaceucal
companies and academic instuons that we compete against for qualied personnel have greater nancial and other re
-
sources, dierent risk proles and a longer history in the industry than we do. Therefore, we might not be able to aract
or retain these key persons on condions that are economically acceptable.
Furthermore, we will need to recruit new managers and qualied scienc, commercial, regulatory and nancial person
-
nel to develop our business if we expand into elds that will require addional skills. Our inability to aract and retain
these key persons could prevent us from achieving our objecves and implemenng our business strategy, which could
have a material adverse eect on our business and prospects.
2.7.2 We expect to expand our development, regulatory and sales and
marketing capabilities, and as a result, we may encounter diculties
in managing our growth, which could disrupt our operations.
We have grown signicantly in number of employees and scope of operaons over the recent years and expect to
experience signicant growth in the number of our employees and the scope of our operaons also in the near future,
parcularly in the areas of drug research, drug development, regulatory aairs and sales and markeng. To manage
our ancipated future growth, we must connue to implement and improve our managerial, operaonal and nancial
systems, expand our facilies and connue to recruit and train addional qualied personnel. Due to our limited nancial
resources and the limited experience of our management team in managing a company with such ancipated growth, we
may not be able to eecvely manage the expansion of our operaons or recruit and train addional qualied personnel.
For example, we are currently outsourcing certain development areas which we cannot cover ourselves due to limited
personnel capacies, for example to Zai Lab in relaon to proof-of-concept trials in two kidney indicaons, LN and MN
or to IQVIA in relaon to proof-of-concept trials in primary SjS and COVID-19-mediated POTS. As a result of our limited
nancial, manufacturing and management recourses, we may forgo or delay pursuit of opportunies with potenal prod
-
uct candidates that later prove to have greater market potenal. Our resource allocaon decisions may cause us to fail
to capitalize on viable commercial products or protable market opportunies. Further, we may relinquish rights to such
product candidates through collaboraons, licensing or royalty arrangements in circumstances where it would have been
more advantageous for us to retain sole development and commercializaon rights.
132 | Risk Factors Related to argenx’s Intellectual Property
PART II
Risk Factors Related to argenx’s Organization and Operations | 133
The expansion of our operaons may lead to signicant costs and may divert our management and business develop
-
ment resources and may dilute our corporate culture, which in turn may make it more dicult to aract and retain em
-
ployees. Any inability to manage growth could delay the execuon of our strategic objecves or disrupt our operaons,
which in turn could materially harm our business and prospects.
2.7.3 Public health issues or other catastrophic events could disrupt the
supply, delivery or demand of products, which could negatively aect
our operations and performance.
Public health crises such as pandemics or similar outbreaks could adversely impact our business. To date, the outbreak
of COVID-19 has already resulted in extended shutdowns of certain businesses in many countries all over the world. The
spread of COVID-19 has impacted the global economy and may impact our operaons, including the potenal interrup
-
on of our clinical trial acvies and our supply chain, and the operaons of our key business partners. Global health
concerns, such as the recent developments around COVID-19, could also result in social, economic, and labor instability
in the countries in which we or the third pares with whom we engage operate. We have also taken temporary precau
-
onary and severely restricve measures intended to help minimize the risk of COVID-19 to our employees, including
temporarily requiring our employees to work remotely, suspending non-essenal travel worldwide for our employees and
discouraging employee aendance at industry events and in-person work-related meengs. These measures could nega
-
vely aect our business. COVID-19 has also caused volality in the global nancial markets and threatened a slowdown
in the global economy, which may negavely aect our ability to raise addional capital on aracve terms or at all. We
cannot presently predict the scope and severity of any potenal business shutdowns or disrupons, but if we or any of
the third pares with whom we engage, including the suppliers, contract manufacturers, clinical trial sites, regulators and
other third pares with whom we conduct business, were to experience shutdowns or other business disrupons, our
ability to conduct our business in the manner and on the melines presently planned could be materially and negavely
impacted. It is also possible that global health concerns such as this one could disproporonately impact the clinical sites
in which we conduct any of our clinical trials, which could have a material adverse eect on our business and our results
of operaon and nancial condion.
In addion, a catastrophic event that results in the destrucon or disrupon of our data centers or our crical business or
informaon technology systems would severely aect our ability to conduct normal business operaons and, as a result,
our operang results would be adversely aected.
2.7.4 Global economic uncertainty and weakening product demand caused by politi-
cal instability, changes in trade agreements and conflicts, such as the conflict
between Russia and Ukraine, could adversely aect our business and financial
performance.
Economic uncertainty in various global markets caused by polical instability may result in weakened demand for our
products and diculty in forecasng our nancial results. Global conicts, including the conict between Russia and
Ukraine, as well as economic sancons implemented by the U.S., the European Union and other countries against
Russia in response thereto, may negavely impact markets, increase energy and transportaon costs and cause weaker
macro-economic condions. Polical developments impacng government spending and internaonal trade may also
negavely impact markets and cause weaker macro-economic condions. While at the date of this Universal Registraon
Document the conict between Russia and Ukraine and the corresponding sancons imposed on Russia, did not directly
impact our operaons, we cannot predict the eect the conict may have on the European and global economic and
thereby, indirectly or directly aect our operaons.
The conict between Russia and Ukraine increased recruitment costs for our ADDRESS trial of SC efgargimod for PF and
PV and is expected to cause delays in our ADDRESS trial. In addion, the sancons imposed by many countries, ongoing
developments and uncertainty related to the conict between Russia and Ukraine could adversely aect us in other ways.
134 | Risk Factors Related to argenx’s Organization and Operations
For example, it could lead to increasing manufacturing costs for our products by causing disrupons in the supply chain,
including as a result of transportaon restricons, increased costs of raw materials, producon costs as well as having
an adverse eect on the availability of materials. The conict between Russia and Ukraine may also result in declines in
the global equity and debt capital markets, liming our ability to access such markets to obtain nancing to conduct our
operaons and growth.
2.7.5 We have obtained significant funding from agencies of the government
of the Flemish region of Belgium and have benefited from certain research
and development incentives, which may be re-evaluated if our shareholder
base changes significantly. The tax authorities may challenge our eligibility
for or our calculation of such incentives.
Pursuant to the general terms of each grant, certain Flemish agencies are entled to re-evaluate the subsidies granted to
us in case of a fundamental change in our shareholding base, which is not dened in the general terms, but we believe
would involve a change of control of us. Any such reevaluaon could negavely impact the funding that we receive or
have received from the Flemish agencies.
The research and development incentives from which we have benefited as a company active in research and devel
-
opment in Belgium can be offset against Belgian corporate income tax due. The excess portion may be refunded at the
end of a five-year fiscal period for the Belgian research and development incentive. The research and development
incentives are both calculated based on the amount of eligible research and development expenditure. The Belgian
tax authorities may audit each research and development program in respect of which a tax credit has been claimed
and assess whether it qualifies for the tax credit regime. The tax authorities may challenge our eligibility for, or our
calculation of, certain tax reductions or deductions in respect of our research and development activities and, should
such a claim of the Belgian tax administration be successful, we may be liable for additional corporate income tax, and
penalties and interest related thereto, which could have a significant impact on our results of operations and future
cash flows. Furthermore, if the Belgian government decide to eliminate, or reduce the scope or the rate of, the re
-
search and development incentive benefit, either of which it could decide to do at any time, our results of operations
could be adversely affected.
2.7.6 Exchange rate fluctuations or abandonment of the euro currency may
materially aect our results of operations and financial condition.
Due to the internaonal scope of our operaons and the signicant posion of cash we need to have available to conn
-
ue our business acvies, our assets, earnings and cash ows are inuenced by movements in exchange rates of several
currencies. Our net sales and costs will be aected by uctuaons in the rate of exchange parcularly between the U.S.
dollar, our new funconal currency as per January 1, 2021, and the euro, Swiss francs, Japanese Yen and Brish pounds,
which are our main nancing and potenal revenue currencies beyond the U.S. dollar. The majority of our operang
expenses are paid in USD, but we also receive payments and we regularly acquire services, consumables and materials in
euros, Swiss francs and Brish pounds. As a result, our business may be aected by uctuaons in foreign exchange rates
between the U.S. dollar and other currencies, which may also have a signicant impact on our reported results of opera
-
ons and cash ows from period to period. Currently, we do not have any exchange rate hedging arrangements in place.
PART II
Risk Factors Related to argenx’s Organization and Operations | 135
136 | Risk Factors Related to argenx’s Organization and Operations
2.7.7 Changing expectations for inflation and deflation and corresponding fluctua-
tions in interest rates could decrease demand for our products and negatively
aect our performance, as well as increase certain operating costs, such as
employee compensation.
Demand for our products and our operang costs may be negavely impacted by adverse condions in the U.S., the Eu
-
ropean Union and global economies. A number of factors may contribute to a decline in economic condions, including,
but not limited to, rising government debt levels, scal and central bank policy shis, the withdrawal of government
intervenons into the nancial markets, changing consumer spending paerns, and changing expectaons for inaon
and deaon which may impact interest rates. For example, at its January 2022 the Federal Open Market Commiee
Meeng, the United States Federal Reserve Bank indicated it expects to raise benchmark interest rates in 2022, paral
-
ly in response to increasing inaon and a strong labor market. Increased interest rates may decrease demand for our
products, even as inaon places pressure on consumer spending, borrowing and saving habits as consumers evaluate
their prospects for future income growth and employment opportunies in the current economic environment, and as
borrowers face uncertainty about the impact of rising prices on their ability to repay a loan. A change in demand for our
products and any steps we may take to migate such change could impact our overall growth. Furthermore, inaonary
and other economic pressure could negavely aect our business, nancial condion, results of operaons, cash ows
and future prospects.
Addionally, an inaonary environment, combined with the ght labor market, could make it more costly for us to aract
or retain employees. In order to meet the compensaon expectaons of our prospecve and current employees due to
inaonary factors, we may be required to increase our operang costs or risk losing skilled workers to competors.
2.7.8 We are exposed to unanticipated changes in tax laws and regulations,
adjustments to our tax provisions, exposure to additional tax liabilities,
or forfeiture of our tax assets.
The determinaon of our provision for income taxes and other tax liabilies requires signicant judgment, including the
adopon of certain accounng policies and our determinaon of whether our deferred tax assets are, and will remain,
tax eecve. We cannot guarantee that our interpretaon or structure will not be quesoned by the relevant tax au
-
thories, or that the relevant tax laws and regulaons, or the interpretaon thereof, including through tax rulings, by the
relevant tax authories, will not be subject to change. Any adverse outcome of such a review may lead to adjustments in
the amounts recorded in our nancial statements and could have a materially adverse eect on our operang results and
nancial condion.
We are subject to laws and regulaons on tax levies and other charges or contribuons in dierent countries, including
transfer pricing and tax regulaons for the compensaon of personnel and third pares. Dealings between current and
former group companies as well as addional companies that may form part of our group in the future are subject to
transfer pricing regulaons, which may be subject to change and could aect us. Compliance with these laws and regula
-
ons will be more challenging as we expand our internaonal operaons, including in connecon with potenal approv
-
als of our products and product candidates in Europe, the U.S. and elsewhere.
Our effective tax rates could be adversely affected by changes in tax laws, treaties and regulations, both internation
-
ally and domestically, or the interpretation thereof by the relevant tax authorities, including changes to the patent
income deduction, possible changes to the corporate income tax base, wage withholding tax incentive for qualified re
-
search and development personnel in Belgium and other tax incentives and the implementation of new tax incentives
such as the innovation deduction. For example, whether the tax authorities in Belgium will agree with argenx BV’s
qualifications and proposed application of patent box tax advantages will have a significant taxation impact on argenx
BV. An increase of the effective tax rates could have an adverse effect on our business, financial position, results of
operations and cash flows.
In addion, we may not be able to use, or changes in tax regulaons may aect the use of, certain unrecognized tax
assets or credits that we have built over the years. For instance, as of December 31, 2021, we had USD 815.3 million of
consolidated tax loss carry forwards. In general, some of these tax losses carry forwards may be forfeited in whole, or in
part, as a result of various transacons, or their ulizaon may be restricted by statutory law in the relevant jurisdicon.
Any corporate reorganizaon by us or any transacon relang to our shareholding structure may result in paral or com
-
plete forfeiture of tax loss carry forwards. For instance, under Belgian law, argenx BV may lose its tax loss carry forwards
and other tax incenves in case of a change of control, through an acquision or otherwise, not meeng legimate nancial
or economic needs as well as in case of a tax neutral reorganizaon, such as a merger or a demerger, involving argenx BV.
The tax burden would increase if prots, if any, could not be oset against tax loss carry forwards.
PART II
Risk Factors Related to argenx’s Organization and Operations | 137
3
PART III
Non-financial
Reporting
Requirements
Contents
3.1 Disclosures pursuant to the EU Non-Financial Reporng Direcve 142
3.2 EU Environmental Taxonomy 147
140 | Non-financial Reporting Requirements
3 Non-financial Reporting
Requirements
The European Direcve 2014/95/EU dated October 22, 2014 (
NFRD
) imposes on public-interest enes which are large undertakings with more than 500 employees, the obligaon to publish non-nancial informaon including informaon on
environmental, social and governance maers (
ESG
), diversity, respect for human rights and on an-corrupon and bribery maers. The NFRD has been fully implemented in The Netherlands by the Act implemenng the Direcve 2014/95/EU
dated September 28, 2016, the Decree disclosure of diversity policy dated December 31, 2016 and the Decree on disclosure
of non-nancial informaon dated March 14, 2017. In the nancial year 2021 we have for the rst me crossed the 500
employee threshold and have become subject to reporng requirements under NFRD.
In addion, as a public interest enty, we became subject to the EU Taxonomy Climate Delegated Act (EU) 2021/2139
(the Climate Delegated Act) reporng requirements.
In this chapter 3, we make all disclosures required for our compliance with NFRD and the Climate Delegated Act, and
ancillary legislaon and guidelines applicable to us.
In addion to the non-nancial disclosures made in this Universal Registraon Document, we plan to publish a separate
and dedicated report on ESG annually, starng in 2022, which will give more context as well as addional, voluntary
disclosures on ESG and related subjects.
PART III
Non-financial Reporting Requirements | 141
The outcome of those
policies
All employees have accepted and are trained (and retrained annually) on our Code of Conduct, and
accepng, and comming to, the contents thereof is expected of all newcomers to argenx.
At the date of this Universal Registraon Document, for the nancial year ended December 31, 2021,
we have not idened any material breaches of our Code of Conduct in relaon to social or employee
maers.
Principle risks Our employees and relevant third pares may engage in misconduct or other improper acvies,
including non-compliance with regulatory standards and requirements, which could have a material
adverse eect on our business.
Our future growth and ability to compete depends in part on our ability to retain key personnel and
recruit addional qualied personnel.
How these risks are
managed
In order to maintain oversight over compliance with the our Code of Conduct and other company policies
including in relaon to potenal violaons in the area of employee and social maers, and to increase
compliance and ensure our colleagues know where to go with quesons on the Code of Conduct and
its applicaon, we have established the argenx COMPASS Helpline, where our employees can raise any
concerns they may have regarding potenal violaons of argenx’ policy condenally or anonymously (to
the extent allowed by law).
We have in 2021 revised our exisng Whistleblower Policy into our new Speak-up Policy compliant with
DIRECTIVE (EU) 2019/1937 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 23 October 2019 on
the protecon of persons who report breaches of Union law (EU Whistleblower Direcve), which policies
(jointly our Speak-up Policy) enables and encourages our employees to speak up and report any suspected
violaon of our Code of Conduct, and to protect them from retaliaon. We have set-up a specic helpline
reachable through dierent channels including by phone, also anonymously, to report suspected potenal
violaons.
Also to migate the risks of non-compliance with our Code of Conduct in relaon to employee and social
maers, we require all new employees to conrm their acceptance and adherence to the Code of Conduct
and we train exisng and new employees annually on our Code of Conduct and our Speak-up Policy.
We oer compeve remuneraon packages and share based incenves in the form of an Equity Incenve
Plan in which all employees are oered the opportunity to parcipate. We perform periodic benchmark
analyses with an external service provider to ensure the compeveness of the compensaon oered to
our key personnel in comparison to other (peer group) companies. We pay close aenon to creang an
environment that supports the further development of the talents of our key people, including through
our personal development plan program.
142 | Disclosures pursuant to the EU Non-Financial Reporting Directive
PART III
Disclosures pursuant to the EU Non-Financial Reporting Directive | 143
3.1 Disclosures pursuant to the EU Non-Financial Reporting Directive
A brief descripon of the
undertaking’s business
model
A descripon of the
policies pursued, including
due diligence processes
At argenx, we are on a journey together to achieve the unthinkable. We are all working hard to build
an integrated, immunology company improving the lives of paents. As we connue to scale up the
business to achieve this vision, it is crical that we do so with integrity and passion. When each of us
acts with honesty and integrity, we gain the trust of our colleagues, paents and communies.
We are dedicated to fostering a workplace where all people feel free to share their thoughts and ideas.
And we insist on building and maintaining a safe and secure work environment, where no one is subject
to unnecessary risk.
We commit to developing our people based on their strengths, to the benet of the broader team.
We comply with internaonal labor standards as well as applicable labor and employment laws,
wherever we operate. This includes prohibing child labor and forced labor, upholding the right to
freedom of associaon, and eliminang discriminaon at work. When selecng our business associates,
we strive to work with third pares who share our commitment to respecng and improving human
rights, and we do not conduct business with any individual or company that parcipates in forced,
bonded or indentured labor or involuntary prison labor, the exploitaon of children (including child
labor), harsh or inhumane treatment or threat of any such treatment or any form of modern slavery or
human tracking.
We believe open communicaon is crical to guaranteeing a posive work environment and our
ulmate success. We understand that to make a dierence we need to foster a culture of openness,
where colleagues are encouraged to share their thoughts and ideas because diversity of thought leads
to and empowers innovaon. We acvely listen to our colleagues and make sure all voices are heard.
Our Code of Business Conduct and Ethics (
Code of Conduct
) reects our core values: a way of working that celebrates innovaon, co-creaon, excellence, humility, and empowerment. Our Code
of Conduct translates the core values into a set of clear standards to help guide our conduct as we
navigate the complexies of the highly regulated and compeve global marketplace in which we
operate as we work to become an independent, fully integrated, and global immunology company.
Our commitment to the Code of Conduct is an enabler to our core business of innovaon and our
culture of collaboraon. We are all dedicated to and responsible for its success. Each of us contributes
to our reputaon by living our core values every day and making the best choices for argenx and the
many people we serve. All employees are trained annually on our Code of Conduct, and accepng, and
comming to, the contents thereof is expected of all newcomers to argenx.
Our Code of Conduct sets out core principles for the way we commit to important employee and
social maers, including our commitment to maintaining the highest scienc and ethical standards
in our research and development acvies and complying with all internaonally accepted standards
that apply to our clinical trials, including the ICH Guidelines for Good Clinical Pracce and the ethical
principles arculated in the Declaraon of Helsinki, as well as applicable local laws and regulaons.
We monitor compliance with these standards through a number of policies which we regularly train
relevant employees on.
We operate a personal development program in which we encourage all employees to parcipate. We
operate short-term and long term incenve plans to encourage aracon and retenon of qualied
personnel.
We take a stance against all forms of discriminaon and commit to promong diversity, equity and
inclusion as set out in our Code of Conduct and in our diversity, equity and inclusion policy. We
encourage respect of the individual, their integrity and their dignity, by ensuring that the working
environment and relaons between colleagues are free of discriminaon and harassment, whether
based on race, religion, color, polical convicons, sex, language, pregnancy, ethnic or naonal origin,
civil state, social status, sexual orientaon, handicap, age or otherwise. We will protect any colleague
who in good faith believes they are vicms of harassment or discriminaon. This includes acons that
can reasonably be considered oensive, inmidang or discriminatory, including sexual harassment,
power harassment and bullying, whether physical, verbal or visual. We encourage colleagues to speak
up against any incident that could be viewed as harassment or discriminaon and to support those
aected. Once informed, we will take all measures required to stop any such behavior and to deal
appropriately with the person or persons involved. The maer will be treated with discreon and
diligence. We strictly prohibit retaliaon or retribuon against anyone who in good faith reports a
concern about harassment, discriminaon, or other issues, or cooperates with an invesgaon into
alleged harassment and discriminaon, even if the inial concern is ulmately determined to be
unfounded, as is further set out in our Speak-up policy which was revised in 2021 to be compliant with
the new EU Whistleblower direcve.
Non-nancial key
performance indicators
At the date of this Universal Registraon Document, for the nancial year ended December 31, 2021, we
have not idened any material breaches of our Code of Conduct in relaon to social or employee maers.
Our voluntary employee turnover rate for the nancial year 2021 is 4.28% and our involuntary employee
turnover rate for the nancial year 2021 was 1.03%, both numbers we believe to be below industry
averages.
Social and employee maers
Subtopic Disclosure
A brief descripon of the
undertaking’s business
model
argenx is dedicated to conducng its business in a safe and environmentally sustainable manner as part of
our commitment to not only improve the lives of paents we hope to serve, but also to posively impact
our colleagues, business partners, and surrounding communies as well. In an eort to do this we:
• comply with environmental laws and regulaons that are related to our specic work and
responsibilies.
• encourage colleagues to respect the environment and natural resources available to us by taking
sustainability steps like liming energy use, reducing waste, and recycling.
• have awareness and training programs to teach our employees how to deal with dierent waste
systems.
We are commied to expanding and developing our sustainability iniaves in the future.
Given the present state of scienc knowledge, it is not possible to examine the complex interacons
in a living organism solely by the use of modeling or performing experiments in cell cultures and ssue
samples. Research using living animals remains essenal in the discovery, development and producon of
new medicines. We cannot replace all animal experiments in the foreseeable future, but we connuously
review the welfare and use of animals and develop procedures that reduce or replace animal experiments.
If we engage in research using live animals, we follow all applicable laws and regulaons, and argenx
policies including our Animal Welfare Policy.
Environmental maers
Subtopic Disclosure
PART III
The outcome of those
policies
Non-nancial key
performance indicators
Principle risks
How these risks are
managed
At the date of this Universal Registraon Document, for the nancial year ended December 31, 2021,
we have not idened any material breaches of our Code of Conduct in relaon to environmental
maers, and we have not idened any material breaches of our Animal Welfare Policy.
At the date of this Universal Registraon Document, for the nancial year ended December 31, 2021,
we have not idened any material breaches of our Code of Conduct in relaon to environmental
maers, and we have not idened any material breaches of our Animal Welfare Policy.
We have assessed our acvies to date and did not idenfy specic risks of material environmental
violaons and as such we have not idened environmental risks as principal risks for argenx.
Our primary research and development acvies take place in our facilies in Zwijnaarde, Belgium. For
these acvies we require, and have obtained, the necessary environmental and biohazard permits
from the responsible governments, required by us for the manner in which we use said facilies.
We may become exposed to liability and substanal expenses in connecon with environmental
compliance or remediaon acvies.
Our personnel could breach the animal welfare commitments set out in our Code of Conduct or our
Animal Welfare Policy.
We comply with environmental laws and regulaons that are related to our specic work and
responsibilies and oer trainings to our employees depending on their area of work. In addion, we
have a dedicated safety advisor and facility manager supervising compliance with environmental law on
our premises.
We train all personnel involved in research acvies with live animals, on our Animal Welfare Policy.
In order to maintain oversight over compliance with the our Code of Conduct and other company
policies including in relaon to potenal violaons in the area of environmental maers, and to
increase compliance and ensure our colleagues know where to go with quesons on the Code of
Conduct and its applicaon, we have established the argenx COMPASS Helpline, where our employees
can raise any concerns they may have regarding potenal violaons of argenx’ policy condenally or
anonymously (to the extent allowed by law), including in relaon to violaons of our Code of Conduct
on environmental maers or in relaon to violaons of our Animal Welfare Policy.
Our Speak-up Policy enables and encourages our employees to speak up and report any suspected
violaon of our Code of Conduct, and to protect them from retaliaon. We have set-up a specic
helpline reachable through dierent channels including by phone, also anonymously, to report
suspected potenal violaons. Also to migate the risks of non-compliance with our Code of Conduct
in relaon to environmental maers, we require all new employees to conrm their acceptance and
adherence to the Code of Conduct and we train exisng and new employees annually on our Code of
Conduct and our Speak-up Policy.
A descripon of the
policies pursued, including
due diligence processes
We do not have an environmental policy. We conduct our acvies within the environmental
regulatory framework set out by those jurisdicons in which we operate in and have obtained all
required environmental licenses and permits. With the goal of migang the risk of failure to obtain
any required environmental permits or licenses, or of losing granted permits or licenses we may need
to operate our business, we regularly evaluate the requirements of such environmental permits and
licenses to ensure connued compliance.
We commit to treang research animals in a humane and responsible manner, in accordance with
Code of Conduct and our Animal Welfare Policy. Our Animal Welfare Policy requires us to perform due
diligence on third party collaborators who engage in research acvies on our behalf, by reviewing their
external cercaon on this topic (such as Associaon for Assessment and Accreditaon of Laboratory
Animal Care Internaonal, or AAALAC, cercaon) or if they have not (yet) been cered, by
performing our own conrmatory due diligence through reviews and/or interviews or wrien quesons
and answers to gain comfort that the standards applied are at the same level as our internal standards
on this topic.
A brief descripon of the
undertaking’s business
model
At argenx, we are on a journey together to achieve the unthinkable. We are all working hard to build
an integrated, immunology company and reach paents. As we connue to scale up the business to
achieve this vision, it is crical that we do so with integrity and passion. When each of us acts with
honesty and integrity, we gain the trust of our colleagues, paents and communies.
Relevant maers with respect to human rights
Subtopic Disclosure
A descripon of the
policies pursued, including
due diligence processes
We commit to compliance with internaonal labor standards as well as applicable labor and
employment laws, wherever we operate. This includes prohibing child labor and forced labor,
upholding the right to freedom of associaon, and eliminang discriminaon at work. When selecng
our business associates, we strive to work with third pares who share our commitment to respecng
and improving human rights, and we do not conduct business with any individual or company that
parcipates in forced, bonded or indentured labor or involuntary prison labor, the exploitaon of
children (including child labor), harsh or inhumane treatment or threat of any such treatment or any
form of modern slavery or human tracking.
Our Code of Conduct includes our commitment to respecng the human rights of all people and
ensure fairness in the workspace. All our personnel is trained annually on our Code of Conduct
including its provisions on respecng human rights. Accepng, and comming to, the contents of the
aforemenoned Code of Conduct is expected of all newcomers to argenx.
The outcome of those
policies
Principle risks
How these risks are
managed
For the nancial year ending December 31, 2021 , there have been no alleged breaches of our Code of
Conduct on the topics of human rights or alleged forced labor or child labor.
We have assessed our acvies to date and did not idenfy specic risks of violaons of human rights
in relaon to our business acvies and as such we have not idened the risk of violaons of human
rights as principal risk for argenx.
In order to maintain oversight over compliance with the our Code of Conduct and other company
policies including in relaon to potenal violaons in the area of human rights, and to increase
compliance and ensure our colleagues know where to go with quesons on the Code of Conduct and
its applicaon, we have established the argenx COMPASS Helpline, where our employees can raise any
concerns they may have regarding potenal violaons of argenx’ policy condenally or anonymously
(to the extent allowed by law), including in relaon to violaons of our Code of Conduct on human
rights related topics.
Our Speak-up Policy enables and encourages our employees to speak up and report any suspected
violaon of our Code of Conduct, and to protect them from retaliaon. We have set-up a specic
helpline reachable through dierent channels including by phone, also anonymously, to report
suspected potenal violaons. Also to migate the risks of non-compliance with our Code of Conduct
in relaon to human rights issues, we require all new employees to conrm their acceptance and
adherence to the Code of Conduct and we train exisng and new employees annually on our Code of
Conduct and our Speak-up Policy.
Non-nancial key
performance indicators
For the nancial year ending 31 December 2021, there have been no alleged breaches of our Code of
Conduct on the topics of human rights or alleged forced labor or child labor.
A brief descripon of the
undertaking’s business
model
A descripon of the
policies pursued, including
due diligence processes
We work with healthcare professionals for the benet of all. The spirit of co-creaon is one of our
core values. To provide beer, more eecve products for paents, we regularly engage healthcare
professionals to provide various services in support of our business. The services provided by
healthcare professionals include clinical invesgaons, advisory services, and speaking engagements at
argenx events.
At argenx, we promote our products ethically and honestly, and only for the uses for which they have
been approved. We believe that healthcare professionals and paents have the right to decide the
most appropriate treatment opons available based on truthful, accurate, and balanced product
informaon that is supported by scienc evidence and is consistent with approved product labeling.
We only use promoonal material and other product informaon that have been approved through our
internal review process. When acng in a promoonal capacity, colleagues and agents of argenx are
required to always give a balanced presentaon of our products, including relevant safety informaon.
Whenever argenx hires a healthcare professional as a consultant, advisor, invesgator, speaker, or in
any other capacity, we require the following requirements are met:
• There must be a documented legimate business need for the services on the part of argenx.
Business relaonships must not be created as a disguised means to induce or reward healthcare
professionals to prescribe, purchase, or recommend argenx products.
• The selecon of healthcare professionals must be based on their qualicaons, experse,
capabilies, experience and other appropriate criteria directly related to the idened need.
• A wrien contract must be executed prior to the commencement of the services that accurately
describes the nature of the services and the basis for remuneraon.
• All compensaon to healthcare professionals must reect fair market value for the services provided.
• Meengs or events organized or sponsored by argenx involving healthcare professionals’ services
must be held at appropriate venues that are conducive to the purpose of the meeng or event.
Maers with respect to an-corrupon and bribery
Subtopic Disclosure
144 | Disclosures pursuant to the EU Non-Financial Reporting Directive
Disclosures pursuant to the EU Non-Financial Reporting Directive | 145
The outcome of those
policies
Principle risks
Non-nancial key
performance indicators
How these risks are
managed
At the date of this Universal Registraon Document, for the nancial year ended December 31, 2021,
we have not idened any breaches of our Code of Conduct in relaon to an-corrupon or an-
bribery maers.
We may be subject to healthcare laws, regulaon and enforcement. Our failure to comply with these
laws could harm our results of operaons and nancial condions. Because many of our healthcare
professional are also our customers, there is the risk that paents and others might perceive potenal
conicts of interest, even when none exist. Failure to comply with applicable healthcare laws and
regulaons may lead to enforcement including civil and administrave penales, nes or criminal
prosecuon and may cause us to incur signicant costs and harm to our business and reputaon.
At the date of this Universal Registraon Document, for the nancial year ended December 31, 2021,
we have not idened any breaches of our Code of Conduct in relaon to an-corrupon or an-
bribery maers.
To avoid even the suggeson of a conict of interest, we conduct all interacons with healthcare
professionals with the utmost integrity, scrupulously adhering to government and industry body
regulaons, as well as enforcing our own strict internal guidelines. We have designed and implemented
a targeted compliance program consisng of a body of codes, policies and procedures, which we
acvely and regularly train all relevant personnel on. We have recruited a dedicated legal and
compliance team to support and monitor compliance with relevant rules and regulaons. Furthermore,
all employees are trained annually on our Code of Conduct, including its provisions on an-bribery and
an-corrupon. Accepng, and comming to, the contents thereof is expected of all newcomers to
argenx.
In order to maintain oversight over compliance with the our Code of Conduct and other company
policies including in relaon to potenal violaons in the area of an-bribery and an-corrupon, and
to increase compliance and ensure our colleagues know where to go with quesons on the Code of
Conduct and its applicaon, we have established the argenx COMPASS Helpline, where our employees
can raise any concerns they may have regarding potenal violaons of argenx’ policy condenally or
anonymously (to the extent allowed by law), including in relaon to violaons of our Code of Conduct
on human rights related topics.
Our Speak-up Policy enables and encourages our employees to speak up and report any suspected
violaon of our Code of Conduct, and to protect them from retaliaon. We have set-up a specic
helpline reachable through dierent channels including by phone, also anonymously, to report
suspected potenal violaons. Also to migate the risks of non-compliance with our Code of Conduct in
relaon to an-bribery and an-corrupon, we require all new employees to conrm their acceptance
and adherence to the Code of Conduct and we train exisng and new employees annually on our Code
of Conduct and our Speak-up Policy.
A descripon of the
policies pursued, including
due diligence processes
We value diversity among our colleagues as an integral component in building a sustainable growth
plaorm. We believe that a diverse workforce enhances our overall performance and success. We
take pride in creang and sustaining a culture and environment where each of us can excel. We bring
together people with diverse backgrounds experiences and funconal experse. By doing so, we
broaden the scope of ideas and creavity essenal to developing and delivering innovave therapies to
paents. Acknowledging and beneng from dierent perspecves promotes diversity of thought and
empowers innovaon. It also contributes to our commitment to improve lives of paents, wherefore
we need teams with a healthy mix of contrasng perspecves and backgrounds that reect the diverse
communies we serve.
We recognize that our people are our greatest strength. Fostering an inclusive work environment where
everyone feels safe and encouraged to contribute leads to beer work outcomes and supports high
levels of employee commitment and retenon. We aspire to be a consciously global company. Our
success is built on, and dependent on true collaboraon in cross-funconal and oen cross-regional
teams in which open communicaon is encouraged and safeguarded. Everyone has a voice and is
encouraged to contribute to the benet of our common goals, irrespecve of race, ethnicity, age,
gender or cultural background. Good ideas as well as real concerns are taken seriously, regardless of
who brings them forward.
Diversity targets
The outcome of those
policies, results of the
Diversity, Equity and
Inclusion Policy
How our diversity, equity
and inclusion policy is
being implemented.
We aim to foster an inclusive work environment in support of our strategic plan and priories. We
connue to raise the bar in this regard, and to commit to measures and goals designed to support our
maturing company culture. We aim to have an equal gender balance in our Board of Directors and in
our company leadership (including funconal leaders and project leaders).
As at December 31, 2021, our Board of Directors consisted of 8 directors, including 1 execuve director
and 7 non-execuve directors. The full board contained 6 male directors (including 1 execuve director)
and 2 female directors (non-execuve), translang into a 75% male / 25% female balance for our full
board of directors and a 71.4% male / 28.6% female balance for our non-execuve directors.
As at December 31, 2021, our company leadership team consisted of 23 persons of whom 14 male
(60%) and 9 female (40%) persons. For the purpose of this statement we dened the leadership team
as consisng of our C-level people as well as the leaders of our largest funcons and projects. Each
of these posions is characterized by high-impact across the organizaon, leading a global and cross-
funconal team and having a global reach.
As at December 31, 2021, 58% of the members of our workforce who disclosed their gender identy,
were female, and 42% male.
Our diversity, equity and inclusion policy is implemented in the way we recruit, develop and promote
our employees. We value our fair, inclusive recruitment process, which is standardized across the
organizaon and focuses on pre-idened ‘what counts’ factors. The process involves a diverse group
of colleagues from across the organizaon, who are provided with training to recognize any exisng
biases. Recruitment decisions are based on a group evaluaon of available candidates, ensuring
dierent perspecves. Our onboarding program is designed to promote inclusion by building a
strong social fabric across teams, funcons and geographic locaons. Furthermore, all employees are
encouraged to parcipate in a personal development program aimed at building on their individuals
strengths to benet the broader team. We oer opportunies for promoon, training and career
development solely based on job-related, appropriate criteria such as skills, competencies, experience,
aptude and enthusiasm and giving account to each individual’s experience, ambions and capabilies.
We will connue to implement our diversity, equity and inclusion policy by seeking new ways to
improve and support diversity, equity and inclusion in our company and we expect to report on specic
iniaves taken in this regard, in the ESG reports expect to publish annually, starng in 2022.
Insight into our diversity, equity and inclusion policy and pracces
Subtopic Disclosure
All arrangements (or reimbursement of expenses) for travel, lodging, and meals that are provided to
healthcare professionals relang to their performance of services must be consistent with Company policies.
We ensure that that we avoid even the percepon of improper inuence by refraining from oering gis or
other items of value.
3.2 EU Environmental Taxonomy
We have examined all taxonomy-eligible economic acvies listed in the EU Taxonomy Climate Delegated Act (EU)
2021/2139 (the
Climate Delegated Act
) based on our acvies as a biopharmaceucal group. The Climate Delegated Act
focuses on those economic acvies and sectors that have the greatest potenal to achieve the objecve of climate change
migaon or climate change adapon or climate change adapon. The sectors covered include energy, selected manufac
-
turing acvies, transport and buildings.
Companies are required to idenfy if their acvies are eligible under the EU Taxonomy Regulaon (EU) 2020/852. Our
main acvity is NACE 72.11 – Research and experimental development on biotechnology. Aer a thorough review involv
-
ing all relevant divisions and funcons, we concluded that our core economic acvies are not covered by the Climate
Delegated Act and consequently are taxonomy-non-eligible.
Our assessment of taxonomy-eligibility is focused on economic acvies, dened as the provision of goods or services
on a market, thus (potenally) generang revenues. In this context, we, as a commercial-stage biopharmaceucal group,
dene the research and development and markeng of pharmaceucal products as the core of our business acvies.
We dene acvies such as the manufacturing or the transport of our pharmaceucal products to our clients as under
-
lying acvies necessary to conduct our core business acvies. Therefore, they are not reported as taxonomy-eligible
acvies and not included in our turnover key performance indicators (
KPI
) as they are not generang external turnover on a standalone basis. We will connue to monitor any future reporng obligaons and their impact.
The KPIs under the Climate Delegated Act include the turnover KPI, the capital expenditure (Capex) KPI and the operang
expenditure (Opex) KPI. For the reporng period 2021, the KPIs have to be disclosed in relaon to taxonomy-eligible eco
-
nomic acvies and taxonomy-non-eligible economic acvies (Art. 10 (2) of the Art. 8 Delegated Act). As our economic
acvies as a biopharmaceucal group are not covered by the Climate Delegated Act, the share of taxonomy-eligible
economic acvies in our total turnover is 0% and – consequently – the related Capex and Opex are also 0%. Accordingly,
the share of taxonomy non-eligible economic acvies is 100% for all three KPIs.
146 | Disclosures pursuant to the EU Non-Financial Reporting Directive
EU Environmental Taxonomy | 147
4
PART IV
Contents
4.1 Dutch Corporate Governance Code, “Comply or Explain” 150
4.2 Management Structure 151
4.3 Report of the Non-Execuve Directors 169
4.4
Remuneraon Report of the Remuneraon and
174
4.5 Risk Appete & Control 202
Corporate
Governance
150 | Dutch Corporate Governance Code, “Comply or Explain” Management Structure | 151
4 Corporate Governance
4.1 Dutch Corporate Governance
Code, “Comply or Explain”
As a Dutch company, we are subject to the Dutch Corporate Governance Code. A copy of the Dutch Corporate Gover
-
nance Code can be found on www.mccg.nl. The Dutch Corporate Governance Code is based on the noon that a com
-
pany is a long-term alliance between the various stakeholders of the company. Stakeholders are groups and individuals
who, directly or indirectly, inuence – or are inuenced by – the aainment of argenx’s objecves: employees, share
-
holders and other lenders, suppliers, customers and other stakeholders. Our Board of Directors has responsibility for
weighing up these interests, generally with a view to ensuring the connuity of the company and its subsidiaries, as the
company seeks to create long-term value. If stakeholders are to cooperate within and with the company, they need to
be condent that their interests are duly taken into consideraon. Good entrepreneurship and eecve supervision are
essenal condions for stakeholder condence in management and supervision. This includes integrity and transparency
of the acons of, and accountability for the supervision by, the Board of Directors.
The Dutch Corporate Governance Code is based on a “comply or explain” principle. Accordingly, companies are re
-
quired to state the extent to which they comply with the principles and best practice provisions of the Dutch Cor
-
porate Governance Code in their annual report and, where it does not comply with them, why and to what extent it
deviates from them.
We acknowledge the importance of good corporate governance and we fully endorse the underlying principles of the
Dutch Corporate Governance Code, which is reected in a policy that complies with the best pracce provisions as
stated in the Dutch Corporate Governance Code (the
Board By-Laws
). The Board By-Laws are available on our website
(www.argenx.com). However, we do not comply with or deviate from the best pracce provisions in the areas set out
below, for the reasons explained in this secon. These deviaons all relate to our remuneraon pracces, which are in
line with our remuneraon policy as approved by our General Meeng in 2021.
• We do not comply with best pracce provisions 3.1.2 under vi of the Dutch Corporate Governance Code, which states
that shares should be held for at least ve years aer they are awarded. In accordance with our remuneraon policy,
pursuant to our Equity Incenve Plan, restricted stock units vest in four equal tranches, which means that one fourth
of the restricted stock units granted are seled at each anniversary of the date of granng, and no lock-up period
applies to any shares acquired at such selement. Our Equity Incenve Plan was craed recognizing that equity
incenves are an important factor in the key jurisdicons in which we operate for aracng and retaining qualied
sta. Hence, we deviate from best pracce provision 3.1.2 under vi to allow for a compeve Equity Incenve Plan. At
the same me, we believe our current Equity Incenve Plan promotes long term value creaon. For instance, opons
cannot be exercised by our directors in the rst three years aer the date of granng and the four-year vesng period
of the restricted stock units ensures that a restricted stock unit package granted cannot be fully seled within four
years aer the grant date. In addion, under our previous opon plans, although opons could be exercised within
the rst three years aer the date of grant of those opons in accordance with the then applicable vesng scheme,
unl the date of this Universal Registraon Document, none of the directors have done so. The Equity Incenve Plan
is regularly reviewed by the Board of Directors and the remuneraon and nominaon commiee in parcular, based
on external benchmarking done by an independent third party. The main purpose of such review and benchmark is to
test if the Equity Incenve Plan, including the type, size and condions of grants thereunder, is suciently compe
-
ve and as such can support our ability to aract and retain talent. In 2021, our Board of Directors has amended our
Equity Incenve Plan in line with our updated remuneraon policy, adding specically the granng of restricted stock
units to the equity incenve scheme and including the aforemenoned vesng schemes. We currently do not expect
to implement trading restricons for our directors that would bring us in full compliance with the Dutch Corporate
Governance in this respect. On this topic, considering the importance of compeve remuneraon for our ability to
aract and retain highly qualied persons, alignment with the reference group is priorized over compliance with this
best pracce provision 3.1.2. We currently do not envision to change our pracce in this respect.
• We do not comply with best pracce provision 3.2.3. of the Dutch Corporate Governance Code, which requires that
the severance payment in the event of dismissal should not exceed one year’s base compensaon. Our remuneraon
policy provides that a severance payment equal to 18 months base compensaon may become payable by argenx
to our Chief Execuve Ocer. The severance component of the remuneraon package is, like all other components,
benchmarked against and aligned with the severance components as idened within the reference group. On this
topic, considering the importance of compeve remuneraon for our ability to aract and retain highly qualied
persons, alignment with the reference group is priorized over compliance with this best pracce provision 3.2.3. We
currently do not envision to change our pracce in this respect.
• We do not comply with best pracce provision 3.3.2. of the Dutch Corporate Governance Code, which requires that
non-execuve directors will not be granted any shares or rights to shares as remuneraon. We note that the ‘best
pracces’ and usages regarding granng equity incenves to non-execuve directors vary signicantly between the
key jurisdicons in which we operate. For example, we conduct a signicant part of our operaons in Belgium and the
Belgian Corporate Governance Code requires that non-execuve directors receive part of their remuneraon in the
form of shares, but not stock opons. Our benchmarking conrms that oering equity incenves to non-execuve
directors in the form of opons and/or shares is on the other hand widely accepted market pracce in the U.S. We
believe it is in the interest of our stakeholders that we are equipped to recruit the talent on our Board of Directors
proporonate to our internaonal ambions. For this reason, we aligned our remuneraon pracces with those
prevalent in the key markets in which we need to compete for talent. Considering specically our signicant acvies
in the U.S. and the specialized knowledge and experience needed on our Board of Directors to maximize our chanc
-
es of success in this region, we need to align our remuneraon pracces for non-execuve directors with the U.S.
companies in our reference group, meaning we oer share opons and/or restricted share units to our non-execuve
directors. We believe this is conscious and well-considered deviaon from the Dutch Corporate Governance Code is
required to serve our long-term global goals and ambions. On this topic, considering the importance of compeve
remuneraon for our ability to aract and retain highly qualied persons, alignment with the reference group is pri
-
orized over compliance with this best pracce provision 3.3.2. We currently do not envision to change our pracce
in this respect. We currently do not envision to change our pracce in this respect.
We are considered as a foreign private issuer in the U.S. As a result, in accordance with the lisng requirements of Nas
-
daq, we may rely on home country governance requirements and certain exempons thereunder rather than relying on
the corporate governance requirements of Nasdaq. In accordance with Dutch law and generally accepted business prac
-
ces in the Netherlands, our Arcles of Associaon do not provide quorum requirements generally applicable to general
meengs of shareholders. To this extent, our pracce varies from the requirement of Nasdaq Lisng Rule 5620(c), which
requires an issuer to provide in its bylaws for a generally applicable quorum, and that such quorum may not be less than
one-third of the outstanding vong stock. Although we must provide shareholders with an agenda and other relevant
documents for the General Meeng, Dutch law does not have a regulatory regime for the solicitaon of proxies, and the
solicitaon of proxies is not a generally accepted business pracce in the Netherlands; thus, our pracce will vary from
the requirement of Nasdaq Lisng Rule 5620(b).
4.2 Management Structure
4.2.1 General
We have a one-er board structure consisng of execuve and non-execuve directors, and a senior management team
responsible for the day-to-day operaons. We have opted for this structure to allow for a division of responsibilies
between our Board of Directors and our senior management team, keeping our Board of Directors at a manageable size
whilst being able to involve some or all members of our senior management team in discussions of the Board of Directors
if and when necessary.
PART IV
In pracce, all members of our senior management team are regularly involved in the discussions of our Board of Direc
-
tors and its commiees, in order to provide informaon and context to the various issues the board needs to decide on.
In addion to being present to meengs from me to me, regular contact (face to face or via electronic means) is kept
between the members of the Board of Directors and its commiees and the members of the senior management team as
well as other senior leaders in the organizaon.
Set out below is a summary of certain provisions of Dutch corporate law as at the date of this Universal Registraon
Document, as well as a summary of relevant informaon concerning our Board of Directors and certain provisions of the
Arcles of Associaon and Board By-Laws (terms of reference) concerning our Board of Directors.
This summary does not purport to give a complete overview and should be read in conjuncon with, and is qualied in
its enrety by reference to the relevant provisions of Dutch law as in force on the date of this Universal Registraon Doc
-
ument and the Arcles of Associaon and Board By-Laws. The Arcles of Associaon are available in the governing Dutch
language and an unocial English translaon thereof, and the Board By-laws are available in English, on our website.
4.2.2 Statement of the Board of Directors
Responsibilies for the Financial Statements and Management Report
In accordance with Arcle 5:25c(2)(c) of the DFSA, the Board of Directors hereby ceres that, to the best of our knowl
-
edge, the consolidated nancial statements of argenx SE as of December 31, 2021, prepared in accordance with Interna
-
onal Financial Reporng Standards (IFRS) as adopted by the European Union, and with the legal requirements applicable
in the Netherlands, give a true and fair view of the assets, liabilies, nancial posion and prot or loss of the company
and the undertakings included in the consolidaon taken as a whole, and that the management report includes a fair
review of the development and performance of the business and the posion of argenx and the undertakings included in
the consolidaon taken as a whole, together with a descripon of the principal risks and uncertaines that they face.
Responsibility for this Universal Registraon Document
The Board of Directors declares that the informaon contained in the Universal Registraon Document, including the
consolidated nancial statements of argenx SE as of December 31, 2021 and the management report, is, to the best of
its knowledge, in accordance with the facts and contains no omission likely to aect its import. The Board of Directors is
responsible for the informaon given in this Universal Registraon Document.
In Control Statement
Our Board of Directors is responsible for the oversight of our risk management acvies and has delegated to the audit
and compliance commiee the responsibility to assist our Board of Directors in this task. While our Board of Directors
oversees our risk management, our senior management is responsible for day-to-day risk management processes. Our
Board of Directors expects our senior management to consider risk and risk management in each business decision, to
proacvely develop and monitor risk management strategies and processes for day-to-day acvies and to eecvely
implement risk management strategies adopted by the Board of Directors. We believe this division of responsibilies is
the most eecve approach for addressing the risks we face.
See secon 4.5 “Risk Appete & Control” for further informaon on our risk appete and control.
4.2.3 Board of Directors
Responsibilies
Under Dutch law (Secon 2:129 paragraph 1 of the DCC), our Board of Directors is collecvely responsible for our general
aairs. Our Board of Directors, our execuve director as well as our non-execuve directors, dene our strategy (as further
set out in secon 1.2 “Strategy and objecves”). Our strategy is regularly discussed and monitored at our board meengs.
Pursuant to our Arcles of Associaon, our Board of Directors will divide its dues among its members, with our day-
to-day management entrusted to the execuve director(s). The non-execuve directors are tasked with supervising the
management of argenx and providing the execuve director(s) with advice. In addion, both the execuve director(s) and
the non-execuve directors must perform such dues as are assigned to them pursuant to the Arcles of Associaon. The
division of tasks within our Board of Directors is determined (and amended, if necessary) by our Board of Directors. Our
execuve director(s) may not be allocated the tasks of: (i) serving as chairperson of our Board of Directors; (ii) determin
-
ing the remuneraon of an execuve director; or (iii) nominang directors for appointment.
Each director has a duty to properly perform the dues assigned to him or her and to act in our corporate interest. As a
principle under Dutch law, the corporate interest extends to the interests of all corporate stakeholders, such as share
-
holders, creditors, employees and other stakeholders.
Composion, Appointment and Dismissal
The Arcles of Associaon provide that our board of directors (the
Board of Directors
) will consist of our execuve direc-
tor(s) and non-execuve directors. The number of execuve directors must at all mes be less than the number of non-ex
-
ecuve directors. The number of directors, as well as the number of execuve directors and non-execuve directors, is
determined by our Board of Directors, provided that the Board of Directors must consist of at least three members.
Our directors are appointed by the shareholders at the General Meeng for a period of four years. In accordance with best
pracce principle 2.2.1 of the Dutch Corporate Governance Code, execuve directors may be re-appointed for periods of
not more than four years at a me. In accordance with best pracce principle 2.2.2 of the Dutch Corporate Governance
Code, non-execuve directors are appointed for a period of four years and may subsequently be re-appointed for anoth
-
er four-year period. The non-execuve director may subsequently be reappointed again for a period of two years, which
appointment may be extended by at most two years. In the event of a reappointment aer an eight-year period, reasons
will be given in the report of the Board of Directors. The Board of Directors is required to make one or more proposals
for each seat on our Board of Directors to be lled. A resoluon to nominate a director by our Board of Directors (with
support from the remuneraon and nominaon commiee) may be adopted by a simple majority of the votes cast. A
nominaon for appointment of an execuve director must state the candidate’s age and the posions he or she holds, or
has held, insofar as these are relevant for the performance of the dues of an execuve director. The nominaon must
state the reasons for the nominaon of the relevant person. A nominaon for appointment of a non-execuve director
must state the candidate’s age, his or her profession, the number of shares he or she holds and the employment posions
he or she holds, or has held, insofar as these are relevant for the performance of the dues of a non-execuve director.
Furthermore, the names of the legal enes of which he or she is already a supervisory board member or a non-execuve
member of the board shall be indicated; if those include legal enes which belong to the same group, a reference to that
group will be sucient. The nominaon must state the reasons for the nominaon of the relevant person.
Our directors are appointed as either an execuve director or as a non-execuve director by the shareholders at the Gen
-
eral Meeng. Our Board of Directors designates one execuve director as Chief Execuve Ocer. In addion, the Board
of Directors may grant other tles to execuve directors. Our Board of Directors designates a non-execuve director as
chairperson of the Board of Directors and a non-execuve director as vice chairperson of the Board of Directors. The legal
relaonship between an execuve member of the Board of Directors and argenx will not be considered as an employ
-
ment agreement. Employment agreements between an execuve director and a group company (other than argenx SE)
are permied. In the absence of an employment agreement, members of a Board of Directors generally do not enjoy the
same protecon as employees under Dutch labor law.
As a foreign private issuer, under the lisng requirements and rules of Nasdaq, we are not required to have indepen
-
dent directors on our Board of Directors, except that our audit and compliance commiee is required to consist fully
of independent directors, subject to certain phase-in schedules. However, our Board of Directors has determined that,
taking into account any applicable commiee independence standards, all of our non-execuve directors, including the
members of our audit and compliance commiee, are “independent directors” under Rule 10A-3 of the Exchange Act and
the applicable rules of the Nasdaq Stock Market and of the Dutch Corporate Governance Code. In making such deter
-
minaon, our Board of Directors considered the relaonships that each non-execuve director has with us and all other
facts and circumstances our Board of Directors deemed relevant in determining the director’s independence, including
the number of ordinary shares benecially owned by the director and his or her aliated enes (if any).
The Dutch Corporate Governance Code requires that the composion of the non-execuve directors is such that the
152 | Management Structure Management Structure | 153
PART IV
members are able to operate independently and crically vis-à-vis one another, the execuve directors, and any parcular
interests involved. At the date of this Universal Registraon Document, all non-execuve directors meet the independence
criteria contained in the Dutch Corporate Governance Code. Therefore, in the opinion of the non-execuve directors, the
composion of our non-execuve directors complies with the independence requirements of best pracce provisions 2.1.7
to 2.1.9 of the Dutch Corporate Governance Code. Our Board of Directors has consequently also determined that all mem
-
bers of our commiees are independent under the applicable rules of the Dutch Corporate Governance Code.
As of the date of this Universal Registraon Document (or in any period before), none of the members of our Board of
Directors and senior management has or has had a family relaonship with any other member of our Board of Directors
or senior management.
Directors may be suspended or removed by the shareholders at the General Meeng at any me, with or without cause,
by means of a resoluon passed by a simple majority of the votes cast. Under Dutch law (Secon 2:134 paragraph 1 of
the DCC), execuve directors may also be suspended by the board of directors. A suspension of an execuve director by
the board of directors may be disconnued by the shareholders at any me at the general meeng.
Diversity
We value diversity as a way of recognizing and valuing the dierences between individuals to come to the most ecient
and eecve way to achieve our strategic objecves. For our Board of Directors, this means that when making recom
-
mendaons to the general meeng for the (re- )appointment of directors, the board will aim for a diverse composion
in terms of such factors as gender and age, in accordance with our diversity policy as may be in force from me to me.
Under Dutch law reporng rules, argenx will be required to address diversity of our Board of Directors in its annual report
or in the report of the Board of Directors (bestuursverslag): (i) composion of the Board of Directors by gender; (ii) objec
-
ves of the diversity policy; (iii) descripon of how the diversity policy is being implemented and the results thereof and
(iv) if there is no diversity policy, this should be explained.
On January 1, 2022, new legislaon entered into force, requiring “large Dutch companies” to set an ‘appropriate and
ambious’ target for their management board, supervisory board and senior execuves (the laer as determined by the
company). If a company has adopted a one-er board structure, the appropriate and ambious target applies to both the
execuve and non-execuve directors. The legislaon is based on a “comply or explain” principle. Accordingly, we will be
required to disclose in our report of the Board of Directors whether or not we are in compliance with the self-imposed
target. In addion, within ten months of the end of the nancial year, we will need to report to the
Sociaal-Economische
Raad
(SER) whether or not we have complied with the self-imposed target.
Board Diversity Matrix (as of the date of this Universal registraon Document)
Our policy is that we will balance our Board of Directors in terms of gender, age, background and naonality as much as rea
-
sonably possible while sll having our board composed of the best possible candidates overall. It has been and will remain our
priority to have the best available specialists on our Board of Directors, irrespecve of age, background, naonality and gender,
who make a balanced panel of directors able to advise and guide argenx to further growth and success for all its stakeholders.
This means we require a number of speciales and character traits to be present. Considering the aforemenoned and the
specialist nature of our business, we will acvely seek to further improve diversity on our board if and when proposing new
appointments to our Board of Directors, whilst acknowledging that age, gender and naonality are important, but not the only
factors relevant for the ulmate decision to select a board member. We have set ourselves the target to over me achieve an
equal gender balance in our Board of Directors, and we will report on our progress annually in our ESG report.
Meengs and decision-making
Our Board By-Laws, that describe, inter alia, the procedure for holding meengs of the Board of Directors, for the deci
-
sion-making by the Board of Directors and the Board of Directors’ operang procedures.
In accordance with our Arcles of Associaon, our Board of Directors will meet at least once every three months to dis
-
cuss the state of aairs within the company and the expected developments.
Under the Board By-Laws, the members of our Board of Directors must endeavor, insofar as is possible, to ensure that
resoluons are adopted unanimously. Where unanimity cannot be achieved and Dutch law, the Arcles of Associaon or
the Board By-Laws do not prescribe a larger majority, all resoluons of our Board of Directors must be adopted by a sim
-
ple majority of the votes cast in a meeng at which at least a majority of the members of our Board of Directors then in
oce are present or represented. The Arcles of Associaon and the Board By-Laws provide that in case of a e of votes,
the chairperson does not have a casng vote and as such the proposal will be rejected in case of a e.
Under the Board By-Laws, some specic maers require approval of the majority of the non-execuve directors. These
maers are set out in Schedule 1 of our Board By-Laws. Our Board By-Laws are available on our website.
In exceponal cases, if the urgent necessity and the interests of argenx require this, resoluons of our Board of Directors
may also be adopted by unanimous wrien approval of all directors in oce. A director may issue a proxy for a specic
board meeng to another director in wring.
The execuve director(s) are required to be asked their vision on their own remuneraon in accordance with best prac
-
ce provision 3.2.2 but may not parcipate in the adopon of resoluons (including any deliberaons in respect of such
resoluons) relang to their remuneraon.
Commiees
In accordance with the Dutch Corporate Governance Code, our non-execuve directors can set up specialized commiees
to analyze specic issues and advise the non-execuve directors on those issues.
The commiees are advisory bodies only, and the decision-making remains within the collegial responsibility of the
Board of Directors. The non-execuve directors determine the terms of reference of each commiee with respect to the
organizaon, procedures, policies and acvies of the commiee.
Our non-execuve directors have established and appointed:
• an audit and compliance commiee; and
• a remuneraon and nominaon commiee.
The composion and funcon of all these commiees complies with all applicable requirements of Euronext Brussels, the
Dutch Corporate Governance code, the Exchange Act, the exchange on which the ordinary shares and the ADS are listed
and SEC rules and regulaons.
Only non-execuve directors qualify for membership of these commiees. The audit and compliance commiee and the
remuneraon and nominaon commiee may not be chaired by the chairperson of the Board of Directors or by a former
execuve director of argenx.
154 | Management Structure Management Structure | 155
PART IV
Country of Principal Execuve Oces The Netherlands
Foreign Private Issuer
Yes
Disclosure Prohibited by Dutch Law No
Total Number of Directors 7
Gender: Number of Directors Female 1 Male 6 Non-Binary 0 Did Not Disclose Gender 0
Demographic Background Categories Number of Directors in Each Demographic Category
Underrepresented individual in home country jurisdicon 1
LGTBQ+ 0
Did not disclose demographic background 6
* We had two female members of our Board of Directors as of December 31, 2021. However, on March 3, 2022, Yvonne Greenstreet stepped down from our
Board of Directors due to me constraints following her appointment as Chief Execuve Ocer of Alnylam. As a result, we have one female member of
our Board of Directors as of the date of this Universal Registraon Document.
In addion to the aforemenoned legally required subcommiees, our Board of Directors may also opt to incorporate
informal commiees consisng of non-execuve directors and other internal and external persons in argenx, in order to
facilitate discussions and act as a sounding board on specic projects, as well as on a more permanent basis. Our Board
of Directors has incorporated a research and development commiee and a commercial commiee.
Audit and Compliance Commiee
Our audit and compliance commiee consists of four members: Werner Lanthaler (chairperson), Peter K. M. Verhaeghe,
Anthony A. Rosenberg and James M. Daly. Our Board of Directors has established that Werner Lanthaler qualies as an
“audit commiee nancial expert” as dened under the Exchange Act and arcle 39 paragraph 1 of Direcve 2014/56/
EU of the European Parliament and of the Council of 16 April 2014 amending Direcve 2006/43/EC on statutory audits of
annual accounts and consolidated accounts and that the composion of the audit and compliance commiee meets the
requirements under the Dutch Decree on Establishing Audit Commiees.
Our audit and compliance commiee assists our Board of Directors in overseeing the accuracy and integrity of our ac
-
counng and nancial reporng processes and audits and reviews of our consolidated nancial statements, the imple
-
mentaon and eecveness of an internal control system and our compliance with legal and regulatory requirements,
the independent auditors’ qualicaons and independence and the performance of the independent auditors.
Our audit and compliance commiee is governed by a charter that complies with Nasdaq lisng rules and the Dutch Cor
-
porate Governance Code. Our audit and compliance commiee is responsible for, among other things, establishing meth
-
ods and procedures for supervising, and where necessary requiring improvements of, our nancial reporng, compliance
and organizaon for the purpose of making appropriate recommendaons to our Board of Directors in that regard.
Our audit and compliance commiee meets as oen as is required for its proper funconing, but at least four mes a
year. Our audit and compliance commiee meets at least once a year with our independent auditor.
Our audit and compliance commiee reports regularly to our Board of Directors on the exercise of its funcons. It in
-
forms our Board of Directors about all areas in which acon or improvement is necessary in its opinion and produces rec
-
ommendaons concerning the necessary steps that need to be taken. The audit review and the reporng on that review
cover us and our subsidiaries as a whole. The members of the audit and compliance commiee are entled to receive all
informaon which they need for the performance of their funcon, from our Board of Directors and employees. Every
member of the audit and compliance commiee shall exercise this right in consultaon with the chairperson of the audit
and compliance commiee.
Remuneraon and Nominaon Commiee
We have established a remuneraon and nominaon commiee, which serves as both the remuneraon commiee
and selecon and appointment commiee as prescribed by the Dutch Corporate Governance Code. Our remuneraon
and nominaon commiee consists of four members: J. Donald deBethizy (chairperson), Peter K. M. Verhaeghe, Werner
Lanthaler and Yvonne Greenstreet.
Our remuneraon and nominaon commiee is responsible for, among other things:
• regularly reviewing the remuneraon policy in light of all relevant circumstances and benchmarks, and recommending
to the non-execuve directors the remuneraon of the individual execuve directors;
• advising our Board of Directors in respect of the remuneraon for the non-execuve directors;
• preparing the remuneraon report to be included in our annual report;
• drawing up selecon criteria and appointment procedures for directors and making proposals for appointment and
re-appointment of the directors;
• periodically assessing the size and composion of our Board of Directors and making a proposal for a composion
prole of the non-execuve directors;
• periodically assessing the funconing of individual directors and reporng on this to the non-execuve directors; and
•
supervising the policy of the execuve directors on the selecon criteria and appointment procedures for senior manage
-
ment.
The remuneraon and nominaon commiee consists of at least three members. The remuneraon and nominaon
commiee meets as oen as is required for its proper funconing, but at least once per year to evaluate its funconing.
Informal subcommiees
Research and Development Commiee
The research and development commiee consists of members of our Board of Directors and other persons, which
composion may vary from me to me. Currently, the research and development commiee consists of three members:
David L. Lacey (chairperson), J. Donald deBethizy and Pamela Klein. J. Donald deBethizy and Pamela Klein are members
of our Board of Directors. David L. Lacey resigned from our Board of Directors per May 11, 2021, but connues to serve
as an advisor on the Research and Development Commiee. Ad-hoc parcipants to the commiee meengs furthermore
include a variety of employees and/or external advisors, depending on the needs of the commiee and the topics under
discussion.
The research and development commiee is responsible for, among other things:
• monitoring and overseeing our research and development goals, strategies and measures;
•
serving as a sounding board to our research and development management, general management and board of directors;
• performing strategic reviews of our key research and development programs;
• reporng to our Board of Directors on the outcome of the strategic reviews;
• reviewing our scienc publicaon and communicaons plan;
• evaluang and challenging the eecveness and compeveness of our research and development endeavors;
•
reviewing and discussing emerging scienc trends and acvies crical to the success of our research and development;
• reviewing our clinical and preclinical product pipeline; and
• engaging in aracng, retaining and developing our senior research and development personnel.
All members of the research and development commiee shall have adequate industrial, academic and/or praccal expe
-
rience with the research and development of biopharmaceucals.
One purpose of our research and development commiee is to engage in discussion with our research and development
personnel, and the commiee’s responsibilies to carry out this purpose include, among others: monitoring the research
and development acvies, performing strategic reviews of the key research and development programs; and reviewing
the scienc publicaon plan.
Our research and development commiee meets as oen as is required for its proper funconing, but typically meets
at least once prior to each meeng of our board of directors, and reports regularly to our Board of Directors on the
outcome of the strategic reviews. The chairperson of our research and development commiee reports to our Board of
Directors on the research and development commiee’s discussions and strategic advice aer each meeng on all mat
-
ters within its dues and responsibilies.
Commercial commiee
The commercial commiee consists of members of our Board of Directors and other persons, which composion may
vary from me to me. As of the date of this Universal Registraon Document, the commercial commiee consists of two
permanent members: James M. Daly (chairperson) and A.A. Rosenberg.
The commercial commiee is responsible for, among other things:
• serving as a sounding board to our branded and unbranded strategic markeng plans, size and scope of our franchises,
pre and post launch market access plan of acon;
• reviewing and discussing global commercial and polical trends aecng our industry and development; and
• reporng to our Board of Directors on the outcome of the strategic reviews.
The non-execuve directors shall appoint and dismiss the members of the commercial commiee. All members of the
commercial commiee shall have adequate industrial, academic and/or praccal experience with the commercializaon
of (bio)pharmaceucals.
Our commercial commiee meets as oen as is required for its proper funconing and reports regularly to our Board of
Directors on the outcome of its strategic reviews.
Management Structure | 157156 | Management Structure
PART IV
PART IV
158 | Management Structure
Management Structure | 159
Peter K. M. Verhaeghe
Peter Verhaeghe has served as a member and chairperson of the board of
arGEN-X B.V. since October 2008 and as non-execuve director on our Board
of Directors since July 2014. Mr. Verhaeghe is the managing partner of VVGB
Advocaten-Avocats, a corporate nance law and tax law rm, a posion he
has held since July 1999. He is currently lead counsel to a number of Belgian,
Dutch, French, U.S. and Swiss life sciences companies. Mr. Verhaeghe served
as the president of the board of directors of Merisant France SAS, as a mem-
ber of the management board of Merisant Company 2 sàrl and as a member
of the board of directors of CzechPak Manufacturing s.r.o. He previously also
served as director of Innogenecs (Belgium), Tibotec-Virco NV, Biocars SA,
and as the chairman of the board of directors of PharmaNeuroBoost NV and
as liquidator in charge of KBC Private Equity Fund Biotech NV from April 2009
to December 2012. Mr. Verhaeghe serves on the board of directors of Par-
cipaemaatschappij Vlaanderen (PMV) NV since May 2018, as chairman of
the board of Hares SA (Luxembourg) since March 2011, and as member of
the board of directors of miDiagnoscs since April 2020. Mr. Verhaeghe also
serves as the chairman of the LP & advisory commiee of Bioqube Factory
Fund I NV. Mr. Verhaeghe holds a degree in law (J.D.) from the University of
Leuven and an LLM degree from Harvard Law School.
Dr. Werner Lanthaler
Dr. Werner Lanthaler has served as a member of our Board of Directors
since July 2014. Dr. Lanthaler is the chief execuve ocer of Evotec SE, a
global drug discovery and development organizaon, a posion he has held
since March 2009. He also serves on the supervisory Board of AC Immune
SA (Switzerland). Dr. Lanthaler previously served on the supervisory boards
of Bioxell SpA and Pantec Biosoluons AG. Dr. Lanthaler holds a degree in
psychology, a Ph. D. in business administraon from Vienna University of
Economics and Business and a Master’s degree in public administraon
from Harvard University.
Dr. J. Donald deBethizy
Dr. J. Donald deBethizy has served as a member of our Board of Directors
since May 2015. Dr. deBethizy has 30 years of experience in research and
development and nancial, business and operang management and
board work in the biotechnology and consumer products industry. He is the
president of White City Consulng ApS and Innovent LLC, board and CEO
coaching consultancies. Previously, Dr. deBethizy served as president and
chief execuve ocer of Santaris Pharma A/S unl October 2014, when the
company was sold to Roche. From August 2000 to June 2012, Dr. deBethizy
was co-founder and chief execuve ocer of Targacept, Inc., a U.S. biotech
-
nology company listed on Nasdaq. He currently serves on the supervisory
4.2.4 Non-Executive Directors
Our Board of Directors as at 31 December 2021 comprised the following seven non-execuve directors:
boards of Albumedix A/S, Lophora ApS Newron Pharmaceucals SpA, Noxx
-
on Pharma NV and AG, Rigontec GmbH and Proterris, Inc. From May 2013 to
November 2014, he served as execuve chairman of Contera Pharma ApS,
and from July 2015 to November 2017, he served as chairman of Rigotec
GmbH. He previously served on the boards of Asceneuron SA, Serendex
Pharmaceucals A/S, Enbiox Inc., Targacept Inc., LigoCyte Pharmaceucals
Inc and Biosource Inc. Dr. deBethizy has held adjunct appointments at Wake
Forest University Babcock School of Management, Wake Forest University
School of Medicine and Duke University. Dr. deBethizy holds a B. Sc. in biolo
-
gy from the University of Maryland, and an M. Sc. and a Ph. D. in toxicology
from Utah State University. He has been a Diplomate of the American Board
of Toxicology.
Dr. Pamela Klein
Dr. Pamela Klein has served as a member of our Board of Directors since
April 2016. Dr. Klein is a principal and founder of PMK BioResearch, which of
-
fers strategic consulng in oncology drug development to corporate boards,
management teams and the investment community, a posion she has held
since 2008. She currently serves as a member of several board of director’s
including F-Star Therapeucs, Jiya Acquision Corps, I-Mab and Patry’s; as
well as various scienc advisor boards. Previously, Dr. Klein spent seven
years at the Naonal Cancer Instute as Research Director of the NCI-Navy
Breast Center, aer which she joined Genentech and was VP, Development
unl 2001. She served as Chief Medical Ocer for Intellikine which was
acquired by Takeda. She was previously Vice President, Development for Ge
-
nentech. Dr. Klein holds a Bachelor’s degree in biology from California State
University and an M.D. from Stritch School of Medicine, Loyola University
Chicago and is trained in internal medicine and medical oncology.
Msc. A. A. Rosenberg
Msc. A. A. Rosenberg has served as a member of our Board of Directors
since April 2017. He currently serves as CEO of TR Advisory Services GmbH,
his own consultancy rm advising on business development, licensing and
mergers and acquisions. Previously Mr. Rosenberg held the posions of
Managing Director at MPM Capital, a venture capital rm (2015 unl 2020).
Head of M&A and Licensing of Novars Internaonal (2013 to 2015) and
Head of Business Development and Licensing at Novars Pharma (2005 to
2012). Mr. Rosenberg currently serves on the boards of directors of SiO2
Material Science, Oculis SA (chairman) and Cullinan Oncology (chairman),
and previously served on the boards of directors at Radius Health Inc., Tri
-
NetX, Inc., iOmx Therapeucs AG, and Clinical Ink. Msc. A.A. Rosenberg has
a B.Sc. (Hons) from the University of Leicester and a M.Sc. Physiology from
the University of London.
James M. Daly
James M. Daly has served as a member of our Board of Directors since May
2018. He joined GlaxoSmithKline in 1985 where he held various posions,
including Sr. Vice President – Respiratory Division with full responsibility for
sales, markeng and medical aairs. He moved to Amgen in 2002 where he
was Sr. Vice President for the North America Commercial Operaons 2011.
In 2012 he joined Incyte, a publicly traded company focused on oncology
and inammaon, where he was chief commercial ocer unl June 2015.
Mr. Daly currently serves as a director of Acadia Pharmaceucals Inc.,
Halozyme Therapeucs, Inc., Bellicum Pharmaceucals, Inc. and Madrigal
Pharmaceucals, all Nasdaq-listed companies. Mr. Daly holds a Bachelor
in Science and a Master in Business Administraon from the University at
Bualo, State University of New York.
Yvonne Greenstreet
Dr. Greenstreet has served as a member of our Board of Directors since
May 2021. She was appointed Chief Execuve Ocer of Alnylam Pharma
-
ceucals eecve January 1, 2022 and was serving as President and Chief
Operang Ocer at Alnylam Pharmaceucals before. Dr. Greenstreet has
more than 25 years of experience in the Biopharmaceucal industry, driving
strategy and innovaon, bringing transformave medicines to paents and
building successful businesses in the U.S., Europe and globally.
Dr. Greenstreet serves on the board of directors of Pacira Pharmaceucals,
American Funds, the Scienc Advisory Commiee of the Bill and Melinda
Gates Foundaon and is a member of the Discovery Council of Harvard
Medical School. Between 2011 and 2013, Dr. Greenstreet was Senior Vice
President and Head of Medicines Development at Pzer serving on the
execuve team leading a rapidly growing $16 billion division. Prior to Pzer,
she was at GlaxoSmithKline plc for 18 years, where she was Senior Vice
President and Chief of Strategy for Research and Development.
Dr. Greenstreet had previously been in various posions of increasing
responsibility at GSK, including Senior Vice President for Medicines Devel
-
opment and Chief Medical Ocer for Europe. Dr. Greenstreet is trained as
a physician and earned her medical degree from Leeds University in the
United Kingdom and her MBA degree from INSEAD, France.
On March 3, 2022, Dr. Greenstreet stepped down from her posion as
member of our Board of Directors due to me constraints following her
appointment as Chief Execuve Ocer at Alnylam.
The following table sets forth certain informaon with respect to the current non-execuve members of our Board of
Directors, including their ages, as at December 31, 2021.
The address for our non-execuve directors is our registered oce, Willemstraat 5, 4811 AH, Breda, the Netherlands.
Peter K.M. Verhaeghe, Werner Lanthaler and James M. Daly are expected to be nominated for re-appointment at the
General Meeng to be held in 2022.
The following table sets forth the companies and partnerships of which the current non-execuve members of our Board
of Directors have been a member of the administrave, management or supervisory bodies or partner at any me in the
previous ve years, indicang whether or not the individual is sll a member of the administrave, management or su
-
pervisory bodies or partner, as of the date of this Universal Registraon Document, other than argenx or our subsidiaries:
12
Name
Age
Gender
Poson Naonality
Date
of Inial
Appointment
Date
of last (re-)
Appointment
Term
Expiraon
Peter K. M.
Verhaeghe
63
M Non-Execuve Director
(chairperson)
Belgium October 15,
2008
May 8, 2018
2022
Werner Lanthaler 53 M Non-Execuve Director
(vice-chairperson)
Austria July 9, 2014 May 8, 2018
2022
J. Donald
deBethizy
71 M Non-Execuve Director U.S. May 13, 2015 May 7, 2019
2023
Pamela Klein U.S. April 28, 2016 May 12, 2020 2024
60 F
Non-Execuve DirectorAnthony A.
Rosenberg
68
M Non-Execuve Director UK April 26, 2017 May 11, 2021 2025
James M. Daly Non-Execuve Director U.S. May 8, 2018 May 8, 2018
60
M2022
Yvonne
Greenstreet
(1)
59 UK May 11, 2021 May 11, 2021 2025
F
Non-execuve director160 | Management Structure
PART IV
Management Structure | 161
(1) On March 3, 2022, Yvonne Greenstreet stepped down from her posion as member of our Board of Directors.
NAME CURRENT
PAST
Peter K. M. Verhaeghe VVGB Advocaten – Avocats PharmaNeuroBoost NV
Hares SA Biocars SA
Parcipaemaatschappij Vlaanderen (PMV) NV Fujirebio Europe NV (formerly Innogenecs NV)
miDiagnoscs NV Tibotec-Virco NV
Bioqube Factory Fund I NV Merisant France SAS
Merisant Company 2 sàrl
CzechPak Manufacturing s. r. o.
Bever Zwerfsport BV
Werner Lanthaler Evotec SE Bioxell SpA
AC Immune SA Pantec Biosoluons AG
J. Donald deBethizy White City Consulng ApS
Rigontec GmbH
Albumedix A/S Noxxon Pharma NV and AG
Newron Pharmaceucals SpA
Proeris Inc.
Lophora ApS
Saniona AB
Albumin Holdings ApS
Innovent LLC
Pamela Klein PMK BioResearch Olema Oncology
Patrys Limited
I-Mab Biopharma
F-Star Therapeucs, Inc.
Jiya Acquision Corp.
Anthony A. Rosenberg Cullinan Oncology Inc. Radius Health, Inc.
Oculis SA TriNetX, Inc.
SiO2 Material Science Clinical Ink, Inc.
TR Advisory Services GmbH iOmx Therapeucs AG
MPM Capital
James M. Daly Acadia Pharmaceucals Inc. Chimerix, Inc.
Halozyme Therapeucs, Inc.
Bellicum Pharmaceucals, Inc.
Madrigal Pharmaceucals
Yvonne Greenstreet
(1)
Alnylam Pharmaceucals, Inc. –
Pacira Pharmaceucals, Inc.
American Fund
Tim Van Hauwermeiren
Tim Van Hauwermeiren co-founded our Company in 2008 and has served
as our Chief Execuve Ocer since July 2008. He has served as a member
of our Board of Directors since July 2014. Mr. Van Hauwermeiren has more
than 20 years of general management and business development experi
-
ence across the life sciences and consumer goods sectors. Mr. Van Hauw
-
ermeiren holds a B. Sc. and M. Sc. in bioengineering from Ghent University
(Belgium) and an execuve MBA from The Vlerick School of Management.
Tim Van Hauwermeiren serves on the board of directors of iTeos Pharma
-
ceucals and Aelin Therapeucs where he is chairman.
Keith Woods
Keith Woods has served as our Chief Operang Ocer since April 2018. Mr.
Woods has over 30 years of experience in the biopharmaceucal industry.
He most recently served as senior vice president of North American opera
-
ons for Alexion Pharmaceucals Inc., where he managed a team of several
hundred people in the U.S. and Canada and was responsible for more
than $1 billion in annual sales. Within Alexion, he previously served as
vice president and managing director of Alexion UK, overseeing all aspects
of Alexion’s UK business, vice president of U.S. operaons and execuve
director of sales, leading the launch of Soliris in atypical hemolyc uremic
syndrome. Prior to joining Alexion, he held various posions of increasing
responsibility within Roche, Amgen and Eisai over a span of 20 years. Keith
Woods holds a B.S. in markeng from Florida State University.
Karl Gubitz
Karl Gubitz has served as Chief Financial Ocer since June 2021. Mr. Gubitz
worked at Pzer for nearly 20 years, most recently as vice president of
nance within the global oncology business. During his tenure at Pzer, he
successfully negoated the commercializaon model for tanezumab with
Eli Lilly in all non-U.S. markets as well as the Myovant co-commercializaon
agreement for Orgovyx™.
Within Pzer, Mr. Gubitz held country, regional, and global posions, and
consistently delivered top-line growth. He managed teams of over 250 col
-
leagues in nancial leadership roles within the global internal medicine and
global innovave products businesses. Prior to joining Pzer in 2003, Mr.
Gubitz held various management roles at PricewaterhouseCoopers.
He holds an M.B.A. from Henley Management College in the United King
-
dom, Bachelor’s degree in compung from the University of South Africa,
and Bachelor of commerce from the University of Pretoria.
4.2.5 Senior Management
Our senior management team acts as our execuve management. Of these persons, only our Chief Execuve Ocer, Mr.
Tim Van Hauwermeiren, is part of our Board of Directors as execuve director. Our senior management team comprised of
the following persons as at December 31, 2021 and as at the date of this URD:
PART IV
162 | Management Structure
Management Structure | 163
(1) On March 3, 2022, Yvonne Greenstreet stepped down from her posion as member of our Board of Directors.
Prof. Hans de Haard
Prof. Hans de Haard is a co-founder of argenx and has served as our Chief
Scienc Ocer since July 2008. Prof. de Haard has been acve in the an
-
body engineering eld since 1989. He also serves as a Professor of immu
-
nology at University of Franche Comté (France). Prof. de Haard holds an M.
Sc. in biochemistry from the Higher Professional Educaon for Laboratory
Technicians (Oss, the Netherlands) and a M. Sc. in chemistry from the Ins
-
tute of Technology (Roerdam, the Netherlands) and a Ph. D. in molecular
immunology from Maastricht University.
Dirk Beeusaert
Dirk Beeusaert has served as General Counsel of argenx since 2017. He has
20 years of experience in corporate governance and as general counsel
of a listed company. Mr. Beeusaert worked in various roles from February
1996 to July 2016 for Gimv NV, a European private equity company listed on
Euronext Brussels, including chief legal ocer from January 2001 to 2006,
and general counsel from 2006 to July 2016, where he was co-responsible
for operaons and corporate governance.
He currently serves on the boards of Cubigo NV and The Fourth Law NV.
Dirk holds a Bachelor of Law, Master of Law from Ghent University and an
MBA in scal studies and accounng research, tax and accounng from
Vlerick Leuven-Gent Management School.
Mr. Beeusaert has rered per December 31, 2021 and has since been suc
-
ceeded by Malini Moorthy as from February 14, 2022.
Malini Moorthy
Malini Moorthy joined argenx as General Counsel in 2022. She has over
25 years of legal experience with extensive experience in the biophar
-
maceucal and medical device sectors, including as senior vice president
& chief deputy general counsel, legal, compliance & government aairs
at Medtronic, vice president & associate general counsel, head of global
ligaon & invesgaons at Bayer Corporaon, vice president & assistant
general counsel, head of civil ligaon at Pzer Inc. Malini Moorthy began
her career as a law rm associate, rst with McCarthy Tétrault and Genest
Murray Desbrisay Lamek in Toronto, Canada and then Salans (now Dentons)
in New York City. She holds a Bachelor of Arts in polical science and eco
-
nomics from the University of North Carolina at Chapel Hill and a Bachelor
of Laws from the Faculty of Law at Queen’s University in Canada.
PART IV
Wim Parys
Wim Parys joined argenx as Chief Medical Ocer in 2019. He has over 25
years of experience leading successful clinical programs in biopharma,
including the development and regulatory submission of seven now-ap
-
proved drugs.
Prior to argenx, he was the R&D head of the newly established Global Pub
-
lic Health group at Janssen (Johnson & Johnson) responsible for a porolio
including programs in HIV (developing rst long-acng therapy), TB, dengue
fever and malaria. Before this, Mr. Parys was the head of development of
the infecous disease therapeuc area of Janssen and Tibotec where he de
-
veloped and launched innovave drugs for HIV (Prezista™, Intelence™ and
Edurant™), Hepas C (Incivo™, Olysio™/Sovriad™), and TB ((Sirturo™).
He started his career within the Johnson & Johnson organizaon at the
Janssen Research Foundaon in Belgium where he led the R&D team
developing galantamine (Reminyl™/Razadyne™) for Alzheimer’s disease. He
obtained his medical degree from the Katholieke Universiteit in Leuven, Bel
-
gium and worked in private pracce for nine years prior to joining industry.
Mr. Parys will rere with eect from March 31, 2022 and will be succeeded
by Luc Truyen as of April 1, 2022.
Luc Truyen
Luc Truyen joined argenx at the end of September 2021. Prior to this, Dr.
Truyen was with Johnson & Johnson for over 20 years holding various
leadership posions, primarily within neuroscience. In his most recent
posion prior to joining argenx, Dr. Truyen was global head of development
and external aairs – neuroscience for neuroscience managing strategy and
delivery of the early and late porolio of assets for mood disorders and
schizophrenia, and neurodegenerave and neuroinammatory disorders.
Besides Dr. Truyen’s strong track record in clinical development resulng
in several global innovave drug approvals, his broad-based experience
also includes leading global clinical development operaons for the whole
Johnson & Johnson pharmaceucal group as well as serving as head of R&D
and chief medical ocer of Janssen Alzheimer Immunotherapy, an internal
spin-out from Johnson & Johnson. Dr. Truyen holds an M.D. and Ph.D. in
Neurology from the University of Antwerp.
Luc Truyen will succeed Wim Parys with eect as of April 1, 2022 as a mem
-
ber of our senior management team.
164 | Management Structure
Management Structure | 165
Arjen Lemmen
Arjen Lemmen joined argenx in 2016 and serves as Vice President of Cor
-
porate Development & Strategy at argenx since 2019. He has successfully
executed several transacons including a number of programs within the
Immunology Innovaon Program and the strategic collaboraon with Jans
-
sen for cusatuzumab.
Prior to joining argenx, Mr. Lemmen served as a corporate nance special
-
ist at Kempen & Co focusing on M&A, equity capital markets and strategic
advisory transacons in the European life sciences industry. He holds a B.Sc.
in Life Science & Technology from the University of Groningen and a Master
of Engineering Management from Duke University.
Andria Wilk
Andria Wilk joined argenx as Global Head of Quality in 2020. Ms. Wilk has
more than 20 years of experience in quality assurance (QA) within the
pharmaceucal industry. Most recently, Ms. Wilk served as senior director,
head of medical, regulatory & clinical QA (MRC QA) at Lundbeck, where
she managed the global MRC QA group based in the EU, U.S. and Asia. In
this role, she was responsible for the global audit programs and QA support
for all clinical trial and post-markeng acvies and related computerized
systems. Prior to Lundbeck, she held various QA posions of increasing
responsibility within AstraZeneca, Takeda Global Research and Develop
-
ment (TGRD) and Astellas Pharmaceucals. Ms. Wilk holds a joint B.Sc.
in Pharmacology and Biochemistry and is a member of Research Quality
Associaon (MRQA).
The following table sets forth certain informaon with respect to the members of our senior management, including
their ages, as at December 31, 2021 and as at the date of this URD:
The address for our senior management is Industriepark-Zwijnaarde 7, 9052 Zwijnaarde (Ghent), Belgium.
The following table sets forth the companies and partnerships of which the current members of our senior management
have been a member of the administrave, management or supervisory bodies or partner at any me in the previous ve
years, indicang whether or not the individual is sll a member of the administrave, management or supervisory bodies or
partner, as of the date of this Universal Registraon Document, other than argenx or our subsidiaries:
Name
Age
Poson Naonality
Date of rst
employment/engagement
Tim Van Hauwermeiren
49
Chief Execuve Ocer and
Execuve Director
Belgium July 15, 2008
(1)
Keith Woods 54 Chief Operang Ocer
U.S.
April 5, 2018Karl Gubitz 52 Chief Financial Ocer Germany June 1, 2021
Prof. Hans de Haard 62 Chief Scienc Ocer The Netherlands July 1, 2008
Dirk Beeusaert
(2)
57 General Counsel Belgium April 1, 2017
Malini Moorthy
(2)
52 General Counsel Canada February 14, 2022
Wim Parys
(3)
62 Chief Medical Ocer Belgium July 1, 2019
Arjen Lemmen 37
Vice-President Corporate
Development & Strategy
The Netherlands May 1, 2016
Andria Wilk
49
Global Head of QualityUK
January 13, 2020(1) Tim Van Hauwermeiren has been a member of our Board of Directors since July 9, 2014.
(2) DirkBeeusaerthasreredperDecember31,2021andhassincebeensucceededbyMaliniMoorthyasfromFebruary14,2022.
(3) WimParyswillrerewitheectfromMarch31,2022andwillbesucceededbyLucTruyenasofApril1,2022.
(1) Mr. Beeusaert has rered per December 31, 2021 and has since been succeeded by Malini Moorthy as from February 14, 2022.
(2) Mr. Parys will rere with eect from March 31, 2022 and will be succeeded by Luc Truyen as of April 1, 2022.
PART IV
Management Structure | 167
166 | Management Structure
Name Current
Past
Tim Van Hauwermeiren Iteos NV –
Aelin Therapeucs
Keith Woods –
Karl Gubitz –
Prof. Hans de Haard – –
Dirk Beeusaert
(1)
Cubigo NV Gimv NV (and group companies of Gimv NV)
The Fourth Law NV TINC NV
Pragma Capital SAS
Grandeco NV
DG Infra+ NV
Finimmo NV
CapMan plc
Malini Moorthy
(1)
– –
Wim Parys
(2)
– –
Arjen Lemmen – –
Andria Wilk – Lundbeck A/S
4.2.6 Confirmation of No Past Oenses
As of the date of this Universal Registraon Document and except as set out below, none of the members of our Board of
Directors and senior management team for at least the previous ve years:
• has been convicted of any fraudulent oenses;
• has been a senior manager or a member of the administrave, management or supervisory bodies of any company at
the me of or preceding any bankruptcy, receivership, liquidaon or of such company being put into administraon;
• has been subject to any ocial public incriminaon and/or sancon by any statutory or regulatory authority (including
any designated professional body); or
• has ever been disqualied by a court from acng as a member of the administrave, management or supervisory bod
-
ies of any company or from acng in the management or conduct of aairs of any company.
4.2.7 Liability of Board and Senior Management Members
Under Dutch law (Secon 2:138 of the DCC), members of our Board of Directors may be liable to us for damages in the
event of improper or negligent performance of their dues. They may be jointly and severally liable for damages to us and
third pares for infringement of the Arcles of Associaon or certain provisions of the Dutch Civil Code (
DCC
). In certain circumstances, they may also incur addional specic civil and criminal liabilies.
The liability of members of our Board of Directors and senior management team is covered by a directors’ and ocers’
liability insurance policy. This policy contains customary limitaons and exclusions, such as willful misconduct or intenonal
recklessness (
opzet of bewuste roekeloosheid
). In addion, according to arcle 15 of our Arcles of Associaon, we will in
-
demnify our directors against liabilies, claims, judgements, nes and penales in relaon to acts or omissions in or related
to his or her capacity as director.
4.2.8 Conflict-of-Interest Transactions
Directors will immediately report any (potenal) direct or indirect personal interest in a maer which is conicng with the
interests of the company and the business connected with it to the chairperson of our Board of Directors and to the other
directors and will provide all relevant informaon, including informaon concerning their spouse, registered partner or
other partner, foster child and relaves by blood or marriage up to the second degree as dened under Dutch law (Secon
1:3 paragraph 1 of the DCC).
The non-execuve directors will decide, without the director concerned being present, whether there is a conict of
interest. A conict of interest in relaon to a director in any event exists if we intend to enter into a transacon with a
legal enty (i) in which such director personally has a material nancial interest, (ii) which has an execuve director or
a member of the management board who is related under family law to such director or (iii) in which such director has
an execuve or non-execuve posion. A director will not parcipate in any discussions and decision making if he has a
conict of interest in the maer being discussed. If for this reason no resoluon can be taken by our Board of Directors
as a whole, the shareholders at a General Meeng will resolve on the maer. All transacons in which there are conicts
of interest with directors will be agreed on terms that are customary in the sector concerned. Decisions to enter into
transacons in which there are conicts of interest with directors that are of material signicance to us or to the relevant
director require the approval of the non-execuve directors. All transacons between us and legal or natural persons
who hold at least one tenth of our shares will be agreed on terms that are customary in the sector in which we and our
combined businesses are acve. The non-execuve directors are required to approve such transacons that are of a
material signicance to us or to such persons.
PART IV
168 | Management Structure
Dutch law spulates that material transacons with related pares that are (a) not entered into in the ordinary course of
business of argenx or (b) that are not concluded on normal market terms, require approval of the board of directors. The
Board of Directors has established an internal procedure to periodically assess whether transacons are concluded in the
ordinary course of business and on normal market terms. Directors that are involved in the related party transacon are
prohibited from parcipang in the deliberaons and vong on the maer. Such material transacons must be made public
by argenx at the me the transacon is entered into. Transacons with related pares are considered material if (i) informa
-
on on the transacon qualies as inside informaon under the Market Abuse Regulaon ((EU) No. 596/2014) (the
Market
Abuse Regulaon
or
MAR
) and (ii) such transacon is entered into with one or more holders of shares in argenx represent
-
ing at least 10% of issued share capital, or a member of our Board of Directors. Transacons that are in itself non-material,
but which are entered into with the same related party during the same nancial year, are jointly considered material.
There are no arrangements or understandings in place with major shareholders, customers, suppliers or others pursuant to
which any member of our Board of Directors or senior management team has been appointed. There are no conicts of in
-
terests between argenx and any administrave, management and supervisory bodies and senior management, nor are there
any potenal conicts of interests of the members of our Board of Directors and senior management between any dues to
argenx and their private interests and or other dues.
4.2.9 Code of Business Conduct and Ethics
We adopted a Code of Business Conduct and Ethics (
Code of Conduct
), that is applicable to all of our employees and directors. The Code of Conduct is available on our website at www.argenx.com. The audit and compliance commiee of
our Board of Directors is responsible for overseeing the Code of Conduct and is required to approve any waivers of the
Code of Conduct for employees and directors. We expect that any amendments to the Code of Conduct, and any waivers
of its requirements, will be disclosed on our website.
4.3 Report of the Non-Executive Directors
4.3.1 Meetings
Our Board of Directors had eight formal meengs in the course of 2021. The meengs were held in the months March
(twice), April, May, July, October, November and December, most of which were held (parally) via videoconferencing
due to restricons related to the COVID-19 pandemic. The commiees of the Board of Directors also convened regularly
(see also paragraphs 4.3.5 “Report Audit and Compliance Commiee” to 4.3.8 “Report Commercial Commiee” below
for the separate reports of the commiees).
All Board of Director meengs and almost all commiee meengs were also aended by Mr. Tim Van Hauwermeiren, as
execuve director. In addion, several members of the senior management team were invited to discuss specic items
included on the Board of Director and commiee meengs’ agendas.
4.3.2 Attendance Record Board of Director Meetings
In 2021, eight Board of Directors meengs were held. The meeng aendance rate for our directors is set out in the table
on the next page.
Report of the Non-Executive Directors | 169
170 | Report of the Non-Executive Directors Report of the Non-Executive Directors | 171
Name
Number of meengs aended in
2021 since appointment
Aendance %
Peter K. M. Verhaeghe (chairperson) 8/8 100%
Werner Lanthaler 7/8 87.5%
J. Donald deBethizy 8/8 100%
Pamela Klein 8/8 100%
Anthony A. Rosenberg 8/8 100%
James M. Daly 8/8 100%
Yvonne Greenstreet
(1)
5/5 100%
David L. Lacey
(1)
3/3 100%
Name
Number of meengs aended in
2021 since appointment
Aendance %
Peter K. M. Verhaeghe 4/4 100%
Werner Lanthaler 4/4 100%
J. Donald deBethizy 4/4 100%
Pamela Klein 4/4 100%
Anthony A. Rosenberg 4/4 100%
James M. Daly 4/4 100%
Yvonne Greenstreet
(1)
2/2 100%
David L. Lacey
(1)
2/2 100%
In 2021, four Board of Directors meengs with solely the non-execuve directors being present were held as closed sessions
at the beginning or the end of other meengs. These four meengs were aended by all non-execuve directors appointed
at such me.
4.3.3 Activities
The agenda for the Board of Directors included long-term value creaon as well as the manner in which the senior
management team implements argenx’s strategy, argenx’s culture to ensure proper monitoring by the non-execuve
directors, the argenx’ nancial posion as well as the results of its subsidiaries, acquisions, large investment proposals,
the yearly budget, director changes and the internal risk management and control system.
In 2021, specic aenon was given to the statutory and governance topics such as the appointment of Ms. Yvonne
Greenstreet as non-execuve director as well as the re-appointment of Mr. Anthony Rosenberg, the impact of COVID-19
and related migang measures, business updates, review and approval of forecasts, the corporate dashboard and
product porolios, business & corporate development, review and approval of consolidated nancial statements, update
research & developments, updates to the remuneraon policy, commiee reports, nancing of argenx, board rotaon
and succession process and plan, and the approval of the proposed agenda, explanatory notes and convocaon noce for
the (extraordinary) general meengs.
(1) Yvonne Greenstreet succeeded David L. Lacey as a non-execuve director aer he resigned from our Board of Directors per May 11, 2021.
Unl his resignaon, David L. Lacey aended as a non-execuve director two out of the two Board of Directors meengs with solely the
non-execuve directors being present held so far that year.
(1) Yvonne Greenstreet replaced David L. Lacey as a non-execuve director aer he resigned from our Board of Directors per May 11, 2021.
Unl his resignaon, David L. Lacey aended as a non-execuve director three out of the three Board of Directors meengs held so far that year.
PART IV
4.3.4 Board Evaluation
The Board of Directors evaluates its funconing and the funconing of its commiees and of each individual director
annually. The evaluaon process is performed with the help of an external professional board evaluaon consultant (in
2021 this was performed by NASDAQ). The evaluaon includes preparing specic quesonnaires focusing on the relevant
skills and competences most relevant for argenx, and the most material board topics and challenges facing argenx. The
wrien quesonnaire is then followed up by one-to-one interviews with each of the members of the Board of Directors,
followed by a debrief to the enre Board of Directors both in wring (in form of a report) and in the form of a live discus
-
sion of the evaluaon report aimed at dislling specic learnings and conclusions.
Based on the self-evaluaon performed, the non-execuve directors concluded that the Board of Directors and its com
-
miees had properly discharged their responsibilies during 2021.
4.3.5 Report Audit and Compliance Committee
The audit and compliance commiee reports regularly to our Board of Directors on the exercise of its funcons. It
informs our Board of Directors about all areas in which acon or improvement is necessary in its opinion and produces
recommendaons concerning the necessary steps that need to be taken. The audit review and the reporng on that
review cover argenx and its subsidiaries as a whole.
In 2021, the main points of discussion at the meengs were the key ndings and risk areas of the 2021 gap analysis on
compliance, the key ndings of the 2021 gap analysis on ESG, the 2020 consolidated nancial statements and press
release, Deloie’s and PwC’s 2020 audit reports, the interim consolidated nancial statements and press releases,
Deloie’s 2021 audit plan, the interim nancial statements, review of quarterly forecasts, updates on internal control
acvies, updates on corporate audit acvies, and updates on cash, cash equivalents and nancial assets.
In 2021, six audit and compliance commiee meengs were held. The meeng aendance rate for our directors is set
out in the table below.
4.3.6 Report Remuneration and Nomination Committee
The remuneraon and nominaon commiee assists the Board of Directors by, amongst other maers, regularly review
-
ing argenx’s remuneraon policy, preparing remuneraon proposals and periodically assessing the size and composion
of the Board of Directors, as well as preparing the policy of the senior management team on the selecon criteria and
appointment procedures for senior management. During their deliberaons in 2021, the main topics of discussion were
the dras of the new remuneraon policy and the new equity incenve plan, the achievements of senior management’s
2021 targets and pay-out of variable pay, the proposed 2021 equity incenve grants and the proposal to move to a single
annual equity grant moment for recurring equity grants.
Name
Number of meengs aended in
2021 since appointment
Aendance %
Peter K. M. Verhaeghe 6/6 100%
Werner Lanthaler (chairperson) 6/6 100%
Anthony A. Rosenberg 6/6 100%
James M. Daly
(1)
3/3 100%
(1) James M. Daly joined the audit and compliance commiee in May 2021.
PV Patient | 173
PV
Patient
David
“ Pemphigus vulgaris has changed the
way I live my life. I’m always watching for
new blisters and lesions and questioning
anytime I feel something strange.’’
In 2021, two formal remuneraon and nominaon commiee meengs were held. The meeng aendance rate for our
directors is set out in the table below.
4.3.7 Report Research and Development Committee
The research and development commiee funcons as a sounding board to argenx’s research and development man
-
agement, general management and the Board of Directors, and monitors the research and development goals, strategies
and measures of argenx. In 2021, the commiee held three formal meengs, in which it focused mainly on the vision and
strategy on science at argenx.
The meeng aendance rate for our directors is set out in the table below.
4.3.8 Report Commercial Committee
The commercial commiee funcons as a sounding board on branded and unbranded strategic markeng plans for the
Board of Directors. In 2021, the commiee held one formal meeng, in which it focused mainly on argenx’s readiness in
the U.S., Japan and EMEA in light of the envisaged launch of efgargimod.
The meeng aendance rate for our directors is set out in the table below.
172 | Report of the Non-Executive Directors
Name
Number of meengs aended in
2021 since appointment
Aendance %
Peter K. M. Verhaeghe 2/2 100%
Werner Lanthaler 2/2 100%
J. Donald deBethizy (chairperson) 2/2 100%
Yvonne Greenstreet 1/1 100%
Name
Number of meengs aended in
2021 since appointment
Aendance %
J. Donald deBethizy 3/3 100%
Pamela Klein 3/3 100%
David L. Lacey (chairperson)
(1)
3/3 100%
Name
Number of meengs aended in
2021 since appointment
Aendance %
Anthony A. Rosenberg 1/1 100%
James M. Daly (chairperson) 1/1 100%
(1) David L. Lacey resigned from our Board of Directors per May 11, 2021.
4.4.2 Remuneration of our Senior Management for 2021 and the Previous Years
The remuneraon of our senior management (including our execuve director, Mr. Tim Van Hauwermeiren) consists of
the following xed and variable components:
• xed base compensaon;
• short-term variable compensaon;
• long-term variable compensaon, in the form of stock opons and restricted stock units;
• severance arrangements; and
• pension and fringe benets.
Fixed base compensaon
The base compensaon of our senior management is determined on the basis of a benchmarking analysis completed by
an independent consulng rm. The xed cash compensaon levels are set at or around the 50th percenle of U.S. and
EU companies in our reference group for U.S. and EU based execuves. The nal determinaon of an execuve director’s
xed pay is made considering this benchmark, the individual’s skills, experience and performance, the remuneraon
pracces and condions across the wider organizaon and our interacons with key stakeholders to secure broad public
support for our remuneraon pracces.
Short-term variable compensaon
The objecve of our short-term annual incenve compensaon is to ensure that our senior management team is incenv
-
ized to achieve performance targets in the shorter term. Variable cash incenves are granted for achieving predetermined
specic performance targets. At the start of each nancial year, the Board of Directors will determine our key priories
and will set specic, challenging performance targets in line with these priories. The Board of Directors will determine
the relave weight of each target and the metrics used for measuring their achievement. Our senior management team
is eligible for an annual short-term variable incenve of their annual base compensaon. The target percentage for this
174 | Remuneration Report of the Remuneration and Nomination Committee Remuneration Report of the Remuneration and Nomination Committee | 175
4.4 Remuneration Report of the
Remuneration and Nomination
Committee
4.4.1 Remuneration Policy 2021 and Changes to the Policy
argenx’s remuneraon policy 2021 is available at argenx’s website via hps://www.argenx.com/sites/default/les/me
-
dia-documents/argenx_remuneraon_policy_nal_approved_11_May_2021.pdf and is incorporated by reference into
this URD. The remuneraon policy was adopted by the General Meeng on May 11, 2021.
The aim is to achieve total remuneraon packages that are aracve and in line with the market. argenx periodically
reviews the posioning of the total remuneraon of the senior management members compared to a reference group of
peer companies acve within the industries wherein argenx operates. Our remuneraon policy and total compensaon
is posioned on the market median or slightly above the market median for xed compensaon, benets and short term
variable, with a strong emphasis on variable compensaon. The long term variable is posioned between the 50th and
the 75th percenle.
In order to realize the group’s ambions in this challenging environment, the organizaon needs to perform strongly and
focus on the implementaon of a sustainable strategy. Talented managers are indispensable in terms of achieving this
goal. The remuneraon policy aims to link this strategy and the Company’s objecves to the performance and remunera
-
on of management. In this way, the Group creates a globally consistent framework for the development, remuneraon
and empowerment of its people. The Group considers commitment, recognion and leadership as important foundaons
for employee engagement. This enables the Group to aract, retain and movate the best talents to achieve both short-
term and long-term objecves. This is all within the context of a globally consistent remuneraon policy that rewards the
contribuon towards and the achievement of company objecves and the generaon of shareholder value.
The reference group for our 2021 cash and equity remuneraon benchmarking consisted of US and Europe based compa
-
nies, taking into account our global ambions as well as the primary markets for talent in which we compete. The compa
-
nies in our reference group were selected based on a combinaon of characteriscs which included their industry, years
since inial public oer, number of employees, revenues, R&D expense, total level of cash & cash-equivalents, 30-day
average market cap and 1-year and 3-year total return on stock. For 2021, the companies in our reference group were:
US companies EU companies
ACADIA Pharmaceucals Abcam
Acceleron Pharma ADC Therapeucs
Agios Pharmaceucals ALK-Abelló
Alnylam Pharmaceucals Ascendis Pharma
Amicus Therapeucs BioNTech
Biohaven Pharmaceucal Cosmo Pharmaceucals
bluebird bio CRISPR Therapeucs
Blueprint Medicines Evotec
BridgeBio Pharma Galapagos
CRISPR Therapeucs Genmab
Denali Therapeucs Idorsia
Fate Therapeucs Mithra Pharmaceucals
FibroGen MorphoSys
Global Blood Therapeucs Swedish Orphan Biovitrum
Intellia Therapeucs uniQure
Mira Therapeucs Zealand Pharma
Reata Pharmaceucals
Sage Therapeucs
Sarepta Therapeucs
Xencor
PART IV
purpose was set to 40% of the annual base compensaon of a member of the senior management team, except for our
execuve director and our chief operang ocer. The target variable cash incenve for our execuve director shall be 60%
of the xed cash compensaon if 100% of targets are achieved and 50% for our chief operang ocer. In case of signicant
overachievement, the Board of Directors may decide to award higher variable pay to fairly reect the individual’s value
contribuon to argenx, but the variable pay will not exceed 120% of the xed cash compensaon.
Financial performance targets relate to building the business and typically make up 60% of the overall variable cash
incenve targets and are aimed at signicantly progressing our product candidates towards market approval and ul
-
mately to the generaon of sales and revenues to further enhance shareholder value and enable and support our further
research and development acvies. For further informaon on our nancial performance targets, see in this secon
below und “Variable compensaon determinaon – CEO”.
Non-nancial targets relate to building the organizaon and typically make up 40% of overall targets and are aimed at
building and developing our organizaon into a sustainable, commercial stage, fully integrated global biopharmaceucal
company in line with our identy and our core values.
Long-term incenve awards
Our Board of Directors intends to incenvize our senior management team by issuing stock opons and/or restricted
stock units from me to me to be able to aract and retain well-qualied senior management in connecon with the
Equity Incenve Plan, as set out below. Typically, stock opons and restricted stock units are granted annually in ac
-
cordance with our equity incenve grant allocaon scheme which is regularly reviewed by our Board of Directors and
parcularly our remuneraon and nominaon commiee.
Severance arrangements
We have entered into management contracts and employment agreements with our senior management team, each
of which provides for certain minimum noce periods if their service or employment with us is terminated in certain
circumstances as described below in secon 6.11.2 “Related Party Transacons”.
Pension and fringe benets
Our senior management team parcipates in a dened contribuon pension scheme operated by a third-party pension
insurance organizaon. Our senior management team is entled to customary fringe benets, such as a company car and
a hospitalizaon plan.
Performance of scenario analyses
In determining the remuneraon package of each individual member of the senior management team, scenario analyses
are performed annually and taken into account in seng the level of the base remuneraon to be paid as well as the
variable remuneraon and the corresponding targets.
Relaons between the remuneraon of execuves in comparison to other company personnel
The total company expense for the non-equity remuneraon paid to our Chief Execuve Ocer (and only execuve di
-
rector) for the year ended December 31, 2021, equaled USD 1,238,772, represenng 787% of the total company expense
for the non-equity median compensaon paid to our employees. This percentage was calculated on the basis of the last
compensaon payment period of the year ended December 31, 2021, over which the median non-equity remuneraon
of all argenx employees relave to their full me percentage was taken into account and set o against the non-equity
remuneraon of our execuve director for the same period. We calculate the aforemenoned percentage on the last
compensaon payment of the relevant period, because due to our rapid growth we deem it relevant to also include our
latest hires in the comparison.
Please see below an overview of the annual change of compensaon, of the performance of argenx and of the median
remuneraon on a full-me equivalent basis (annualized for employees who joined or le argenx during the year) of
argenx’s employees, other than the execuve director, over the ve most recent nancial years:
176 | Remuneration Report of the Remuneration and Nomination Committee Remuneration Report of the Remuneration and Nomination Committee | 177
Financial year ended December 31,
2017 2018 2019 2020 2021
Stock opons granted to our CEO 80,000 80,000 80,000 50,000 25,000
Median stock opons granted to
our employees
2,500 2,500 2,800 2,900 981
Rao employee/CEO 3.13% 3.13% 3.50% 5.80% 3.9%
Average number of stock opons
granted to non-execuve directors
15,000 12,143 10,000 10,000 2,869
Median stock opons granted to
our employees
2,500 2,500 2,800 2,900 981
Rao non-execuve directors/employee 16.67% 20.59% 28.00% 29.00% 34.20%
The decrease in the remuneraon rao between our key senior management and other employees between 2020 and
2021 is caused by the decreased median salary paid to our employees, also as a result of our expansion in the U.S. and
Japan.
The comparison of non-equity compensaon above is made between the compensaon paid to our single execuve
director, and the median compensaon paid to our employees. We have opted to compare non-equity salaries in this
comparison, because whereas the number of opons granted is linked to the overall size of remuneraon packages
granted, the value of equity components depends on the evolvement of our share price, volality and the risk-free rate,
which is unknown at granng and as such the forward looking valuaon methods for opons normally do not provide an
accurate economic value.
Due to the global spread of our employees over mulple connents, we deem it relevant to also include the above com
-
parison separately to our U.S. employees, EU employees and Japan employees. Due to the overall higher compensaon
level in our business segment in the U.S. and Japan compared to the EU, there is a signicant dierence in the pay rao
when the CEO’s compensaon is compared to the median compensaon of all our employees (the majority of which are
EU persons), as set out above, or compared to employees in the U.S. and Japan. The following informaon is provided for
reference purposes:
For the share based payments the raos are as follows:
Financial year ended December 31,
(In USD thousands,
unless otherwise indicated)
2017 2018 2019 2020 2021
Non-equity remuneraon of our CEO 648,108 926,577 952,995 1,094,367 1,238,772
Non-equity median salary paid
to our employees
108,417 110,196 121,603 163,062 157,349
Rao employee/CEO 16% 12% 13% 15% 13%
Average compensaon paid to
non-execuve directors
60,249 59,891 60,372 57,925 54,484
Number of employees at end of year 73 105 188 336 650
Share price at end of year Euronext EUR 52.52 85.20 143.60 242.00 315.30
Share price at end of year Euronext USD 62.99 97.55 161.32 296.96 357.11
PART IV
Rao of non-equity compensaon of the average employee compared
to the CEO for the nancial year ended December 31, 2021
All employees 13%
European employees 8%
US employees 17%
Japan employees 9%
PART IV
Remuneration Report of the Remuneration and Nomination Committee | 179178 | Remuneration Report of the Remuneration and Nomination Committee
The total employment costs (excluding any stock opons) paid by us in the nancial year 2021 was split between regions
as follows:
As a result of linking long term targets, designed to increase argenx’s performance in the present as well as the future,
the variable compensaon of our senior management team intends to align the interests of the senior management
team to that of the (other) stakeholders of argenx. The Board of Directors believes that a remuneraon package com
-
prised of a xed compensaon a variable compensaon linked to individual targets as well as opons linked to a vesng
scheme is most suitable to achieve this goal.
Remuneraon and Benets of the CEO
The following table sets forth informaon regarding compensaon paid by us for Tim Van Hauwermeiren during the year
ended December 31, 2021.
Variable compensaon determinaon – CEO
The mix between xed and variable remuneraon components for our execuve director for at least the last three
years is set out below.
For 2021, the variable pay targets for our senior management included targets relang to the following topics (in addion
to a number of non-disclosed targets)
1. Building the business:
a. Research progress: Nominated new indicaons for specied product candidates;
b. Commercial development: Established launch key performance indicators;
c. Regulatory approvals: Obtained regulatory approval key performance indicators relang to VYVGART in the U.S.
and Japan;
d. Cash management and nancing: Raised a minimum amount of capital to support the business objecves;
e. Supply chain capabilies: Built out our global supply chain in preparaon of the commercial launch and clinical
development objecves of VYVGART.
2. Building the organizaon:
a. Team development: Accomplished the recruitment objecves for commercial posions as well as the recruitment
and onboarding of a number of key senior leadership roles;
b. Legal / compliance development: Put in place a number of policies, processes, resources and training to prepare
the company for its commercial life;
c. Company culture focus: Delivered on our goals inclusive of imbedding and reinforcing our cultural values and
leading by example.
Compensaon in USD Financial year ended December 31,
Fixed base compensaon 651,986
Long-term variable compensaon, in the form of stock opons
(1)
3,895,370
Long-term variable compensaon, in the form of
restricted stock units
2,084,509
Employer social security contribuon stock opons
(2)
–
Non-equity incenve plan compensaon 586,787
Pension contribuons 26,894
Social security costs 3,456
Other
(3)
14,827
Total
7,263,828
(1) Amount shown represents the expenses with respect to the stock opon awards granted in 2021 to Mr. Van Hauwermeiren measured using the Black
Scholes formula. For a descripon of the assumpons used in valuing these awards, see note 14 “Share-based payments” to our consolidated nancial
statements in chapter 7 “Consolidated Financial Statements – audited as of and for the years ended December 31, 2021, 2020 and 2019”. These
amounts do not reect the actual economic value realized by Mr. Van Hauwermeiren.
(2) argenx incurs employer social security costs with respect to the opon awards granted to the members of our senior management. The amount of
employer social security costs depends on the actual economic value realized and therefore varies based on the price of our ordinary shares. At each
reporng date, argenx makes a calculaon of the exposure.
(3) Consists of USD 14,626 aributable to the lease of a company car and USD 201 in employer-paid medical insurance premiums.
Non-cash
Non-cash
86%
Non-cash
88%
Fi
xe
d62%
Fi
xe
d65%
Fi
xe
d65%
Variable
38%
Variable
35%
Variable
35%
Cash
12%
Cash
14%
Cash
2021
20202019
Variable
pay
8%
Other
benets
1%
Total cash/
non-cash
Total cash fixed/
variable
Total
Base
salary
9%
Base
salary
9%
Base
salary
8%
Long term variable
compensaon
81%
83%
Equity
incenves
85%
Equity
incenves
87%
Variable
pay
5%
Variable
pay
4%
Other
benets
1%
Other
benets
1%
17%
Total remuneraon paid in the nancial
year ended December 31, 2021 (in USD millions)
EU
47.9
U.S. 64.8
Japan 7.9
Remuneration Report of the Remuneration and Nomination Committee | 181180 | Remuneration Report of the Remuneration and Nomination Committee
All of the targets for 2021 were achieved, with overperformance of up to 200% granted for some targets, parcularly
where the targets were overachieved in absolute terms, or where the targets were achieved despite signicant unfore
-
seen obstacles, including relang to COVID-19.
Our CEO’s variable pay targets related to:
Building the business (60%):
•
If accelerated approval, deliver on number of new paent starts, if December approval, research progress target (40%)
•
Commercial development and launch preparedness targets (20%)
Building the organizaon (40%):
•
Team development (20%)
•
Company culture (20%)
Our Board of Directors resolved that each of the variable pay targets of our CEO had been met in 2021, and that an over
-
performance warranted 150% pay-out of the variable pay, considering among other things the successful overcoming of
signicant challenges coming out of the COVID-19 pandemic in this pre-launch year and taking into account the success
in recruing and onboarding key funcons in the senior management team.
The rao between xed and variable payments to our CEO for the nancial year ended December 31, 2021 equals USD
651,986/USD 586,787 or 52.6%/47.4%.
Remuneraon of Other Members of the Senior Management
The following table sets forth informaon regarding aggregate compensaon paid by us for the members of our execuve
management (excluding our CEO Tim Van Hauwermeiren) during the year ended December 31, 2021. We note that these
numbers also include compensaon paid to persons who have been part of our execuve management for part of 2021
(being Karl Gubitz).
Compensaon in USD Financial year ended December 31,
Fixed base compensaon 2,812,668
Long-term variable compensaon, in the form of stock opons
(1)
11,165,679
Long-term variable compensaon, in the form of restricted stock
units
5,940,183
Employer social security contribuon stock opons
(2)
4,171,822
Non-equity incenve plan compensaon 1,433,378
Terminaon benets 381,522
Pension contribuons 123,002
Social security costs 785,489
Other
(3)
258,950
Total
27,072,693
(1) Amount shown represents the expenses with respect to the stock opon awards granted in 2021 to Mr. Keith Woods, Mr. Karl Gubitz, Prof. Hans
de Haard, Mr. Wim Parys, Mr. Arjen Lemmen and Miss Andria Wilk measured using the Black Scholes formula. For a descripon of the assumpons
used in the valuing these awards, see note 14 “Share-based payments” to our consolidated nancial statements in chapter 7 “Consolidated Financial
Statements – audited as of and for the years ended December 31, 2021, 2020 and 2019”. These amounts do not reect the actual economic value
realized by these members of our senior management.
(2) argenx incurs employer social security costs with respect to the opon awards granted to the members of our senior management. The amount of
employer social security costs depends on the actual economic value realized and therefore varies based on the price of our ordinary shares. At each
reporng date, argenx makes a calculaon of the exposure.
(3) Consists of USD 78,181 aributable to the leases of company cars, USD 136,893 in car, housing and other allowances and USD 43,876 in employer-paid
medical insurance premiums.
Opon Awards for Our Senior Management
The following table sets forth informaon regarding opon awards granted to our senior management during the year
ended December 31, 2021:
The following table sets forth informaon regarding restricted stock units granted to our senior management during the
year ended December 31, 2021:
Following our annual remuneraon and benchmarking exercise the base amount of equity for the CEO was adjusted
downward (from the approved remuneraon policy 2021) to 32,000 stock opons and 7,200 restricted stock units. The
Remuneraon and Nominaon Commiee discussed a recommendaon of 130% of this base amount based on perfor
-
mance (being 41,600 stock opons and 9.360 restricted stock units). However, following consultaon of the CEO in line
with best pracce principle 3.2.2. of the Dutch Corporate Governance Code, at the request of the CEO, the Board of Di
-
rectors agreed to grant only 25,000 stock opons and 5,700 restricted stock units to the CEO and to recommend placing
the dierence (being 16,600 stock opons and 3,660 restricted stock units) at the disposion of the CEO for distribuon
to key individuals in the April 1, 2022 equity grant.
Name Stock opons Expiraon date
Exercise price
(IN USD)
Tim Van Hauwermeiren
(1)
25,000 December 24, 2031 350.20
Eric Castaldi
(2)
– – –
Keith Woods 16,000 December 24, 2031 350.20
Karl Gubitz
(2)
24,000 July 1, 2031 288.93
Hans de Haard
(1)
16,000 December 24, 2031 350.20
Dirk Beeusaert
(3)
– – –
Wim Parys
(4)
– – –
Arjen Lemmen
(1)
16,000 December 24, 2031 350.20
Andria Wilk
(1)
4,446 December 24, 2031 350.20
PART IV
(1) On December 24, 2021, the Company has granted opons for which each beneciary has a 60 day period to choose between a contractual
term of ve or ten years.
(2) Eric Castaldi resigned from his posion as chief nancial ocer on our senior management in June 2021 and was succeeded by Karl Gubitz.
(3) Mr. Beeusaert has rered per December 31, 2021 and, therefore, was not granted any equity incenves in 2021.
(4) Mr. Parys will rere with eect from March 30, 2022 and, therefore, was not granted any equity incenves in 2021.
Name Restricted stock units Expiry date
Tim Van Hauwermeiren 5.700 December 24, 2031
Eric Castaldi
(1)
– –
Keith Woods 3.600 December 24, 2031
Karl Gubitz
(1)
5.400 July 1, 2025
Hans de Haard 3.600 December 24, 2031
Dirk Beeusaert
(2)
– –
Wim Parys
(3)
– –
Arjen Lemmen 3.600 December 24, 2031
Andria Wilk 988 24/12/2031
(1) Eric Castaldi resigned from his posion as chief nancial ocer on our senior management in June 2021 and was succeeded by Karl Gubitz.
(2) Mr. Beeusaert has rered per December 31, 2021 and, therefore, was not granted any equity incenves in 2021.
(3) Mr. Parys will rere with eect from March 30, 2022 and, therefore, was not granted any equity incenves in 2021.
Remuneration Report of the Remuneration and Nomination Committee | 183
Name
Total stock opons held
on January, 1, 2021
Stock opons
granted in 2021
Stock opons
forfeited in 2021
Stock opons
exercised in 2021
Total stock opons held
on December 31, 2021
Exercise price
(in USD)
Stock opons
vested through 2020
Stock opons
vested through 2021
Stock opons
to vest in 2022
Stock opons
to vest in 2023
Stock opons
to vest in 2024
Tim Van Hauwermeiren 290,000 25,000 – – 315,000 23.98 80,000
97.77 53,333 26,667
153.75 26,667 26,666 26,667
280.43 16,667 16,666 16,667
350.20 8,333 8,334 8,333
Total
290,000 25,000 – – 315,000 160,000 70,000 51,666 25,001 8,333
Eric Castaldi
(1)
171,400 125,000 23.98 25,000
– –
(46,400) 97.77 50,000
153.75 50,000
Total
171,400 – – (46,400) 125,000 125,000 – – – –
Keith Woods 155,000 16,000 141,000 97.77 8,333 16,667
–
(30,000)153.75 16,667 16,666 16,667
280.43 16,667 16,666 16,667
350.20 5,333 5,334 5,333
Total
155,000 16,000 – (30,000) 141,000 25,000 50,000 38,666 22,001 5,333
Karl Gubitz
(1)
– –
24,000
–24,000 288.93 11,333 8,000 4,667
Total
– 24,000 – – 24,000 – – 11,333 8,000 4,667
Hans de Haard 545,975 16,000 2.76 144,822
– –
561,9758.12 109,000
10.72 28,200
12.99 28,200
16.01 28,200
20.85 14,353
23.98 43,200
97.77 33,333 16,667
153.75 16,666 16,668 16,666
280.43 16,667 16,666 16,667
350.20 5,333 5,334 5,333
Total
545,975 16,000 – – 561,975 445,974 50,002 38,665 22,001 5,333
182 | Remuneration Report of the Remuneration and Nomination Committee
The table below shows the stock opons held at January 1, 2021 and the stock opons granted to our senior manage
-
ment which have vested during the year ended December 31, 2021, as well as the stock opons scheduled to vest in
the years ending December 31, 2022, December 31, 2023 and December 31, 2024 (in number of stock opons), and the
respecve exercise price of such stock opons:
PART IV
(1) Eric Castaldi resigned from his posion as chief nancial ocer on our senior management in June 2021 and was succeeded by Karl Gubitz.
Remuneration Report of the Remuneration and Nomination Committee | 185184 | Remuneration Report of the Remuneration and Nomination Committee
Name
Total stock opons held
on January, 1, 2021
Stock opons
granted in 2021
Stock opons
forfeited in 2021
Stock opons
exercised in 2021
Total stock opons held
on December 31, 2021
Exercise price
(in USD)
Stock opons vested
through 2020
Stock opons vested
through 2021
Stock opons
to vest in 2022
Stock opons
to vest in 2023
Stock opons
to vest in 2024
Dirk Beeusaert
(2)
204,682 – – (54,682) 150,000 91.54
23,500
4,700
97.77 14,533
7,267
128.53
30,757
19,243
222.16
12,756 37,244
Total
204,682 (54,682) 150,000 81,546 68,454 – – –
–
–Wim Parys 225,000 97.77 83,333 41,667
– – –
225,000153.75 16,667 16,666 16,667
280.43 16,667 16,666 16,667
Total
225,000 – – – 225,000 100,000 75,000 33,333 16,667 –
Arjen Lemmen 136,211 16,000 145,781 20.85 4,306
–
(6,430)23.98
6,328
91.54
2,361 834
97.77
8,452 7,500
153.75
24,963 12,519 12,518
280.43 16,667 16,666 16,667
350.20
5,333 5,334 5,333
Total
136,211 16,000 – (6,430) 145,781
46,410 37,520 34,517 22,001 5,333
Andria Wilk 19,300 4,446 23,746 153.75 4,693 2,353 2,354
280.43 4,575 2,663 2,662
350.20 1,482 1,482 1,482
Total
19,300 4,446 23,746
4,693 6,928 6,499 4,144 1,482
PART IV
(1) Eric Castaldi resigned from his posion as chief nancial ocer on our senior management in June 2021 and was succeeded by Karl Gubitz.
(2) Dirk Beeusaert rered eecve December 31, 2021 and was succeeded by Malini Moorthy eecve February 14, 2022.
186 | Remuneration Report of the Remuneration and Nomination Committee Remuneration Report of the Remuneration and Nomination Committee | 187
Name
Total restricted stock units
held on January, 1, 2021
Restricted stock units
granted in 2021
Restricted stock units
forfeited in 2021
Restricted stock units
exercised in 2021
Total restricted
stock units held on
December 31, 2021
Restricted stock
units vested
through 2021
Restricted stock
units to vest in
2022
Restricted stock
units to vest in
2023
Restricted stock
units to vest in
2024
Restricted stock
units to vest in
2025
Tim Van Hauwermeiren 1,425 1,425 1,425
–
5,700 – –
5,700 –
1,425 Total
– – 5,700 – 1,425 1,425 1,425 1,425
5,700
–Eric Castaldi
(1)
– – – – – – – – – –
Total
– – – – – – – – – –
Keith Woods 900 900 900
–
3,600 – –
3,600 –
900 Total 900 900 900
– – 3,600 –
900 3,600
–Karl Gubitz
(1)
– –
5,400
– 5,400
– 1,350 1,350 1,350 1,350
Total
– – 5,400 –
5,400
– 1,350 1,350 1,350 1,350
Hans de Haard 900 900 900
–
3,600 – –
3,600 –
900 Total 900 900 900
– – 3,600 –
900 3,600
–Dirk Beeusaert
– – – – – – – – –
–
Total
– – – – – – – – – –
Wim Parys
– – – – – – – – – –
Total
– – – – – – – – – –
Arjen Lemmen 900 900 900
–
3,600 – –
3,600 –
900 Total 900 900 900
– – 3,600 –
900 3,600
–Andria Wilk 247 247
–
988 – –
988 –
247Total
– –
988 988
––
247 247 247
PART IV
The table below shows the restricted stock units held at January 1, 2021 and the restricted stock units granted to our
senior management which have vested during the year ended December 31, 2021, as well as the restricted stock units
scheduled to vest in the years ending December 31, 2022, December 31, 2023, December 31, 2024 and December 31,
2025 (in number of restricted stock units):
(1) Eric Castaldi resigned from his posion as chief nancial ocer on our senior management in June 2021 and was succeeded by Karl Gubitz.
(2) Dirk Beeusaert rered eecve December 31, 2021 and was succeeded by Malini Moorthy eecve February 14, 2022.
Remuneration Report of the Remuneration and Nomination Committee | 189
Name
Number of
Stock opons
Exercise price
(in USD)
Tim Van Hauwermeiren – –
Eric Castaldi
(1)
28,200 16.01
18,200 23.98
Keith Woods 5,000 23.98
25,000 97.77
Karl Gubitz
(1)
– –
Hans de Haard – –
Dirk Beeusaert
(2)
39,682 20.85
15,000 23.98
Wim Parys – –
Arjen Lemmen 3,215 12.99
Arjen Lemmen 3,215 16.01
Andria Wilk – –
Total
137,512
(1) On December 24, 2021, argenx granted opons for which the beneciary has a 60 day period to choose between a contractual term of ve or ten years.
(2) Eric Castaldi resigned from his posion as chief nancial ocer on our senior management in June 2021 and was succeeded by Karl Gubitz.
(3) Dirk Beeusaert rered eecve December 31, 2021 and was succeeded by Malini Moorthy eecve February 14, 2022.
(4) In accordance with the equity plan, restricted stock units, once vested, will be seled against the issuance of ordinary shares in argenx SE. Such shares
have no expiry date and may be held by the parcipant without limitaon.
(1) Eric Castaldi resigned from his posion as chief nancial ocer on our senior management in June 2021 and was succeeded by Karl Gubitz.
(2) Dirk Beeusaert rered eecve December 31, 2021 and was succeeded by Malini Moorthy eecve February 14, 2022.
188 | Remuneration Report of the Remuneration and Nomination Committee
Name
Number of
Stock opons
Remaining term on December
31, 2021 (rounded up)
Number of restricted
stock units
(4)
Tim Van Hauwermeiren
(1)
80,000 6 years 5,700
80,000 7 years
80,000 8 years
50,000 9 years
25,000 5 years / 10 years
(1)
Eric Castaldi
(2)
17,360 2 years
18,120 3 years
25,000 6 years
32,640 7 years
31,880 8 years
Keith Woods 25,000 7 years 3,600
50,000 8 years
50,000 9 years
16,000 10 years
Karl Gubitz
(2)
24,000 10 years 5,400
Hans De Haard
(1)
108,996 0.5 years 3,600
35,826 3 years
109,000 3 years
28,200 4 years
28,200 4.5 years
28,200 5 years
14,353 5.5 years
43,200 6 years
50,000 7 years
50,000 8 years
50,000 9 years
16,000 5 years / 10 years
(1)
Dirk Beeusaert
(3)
28,200 1.5 years –
21,800 2 years
50,000 2.5 years
50,000 3.5 years
Name
Number of
Stock opons
Remaining term on December
31, 2021 (rounded up)
Number of restricted
stock units
Wim Parys 125,000 2 years –
50,000 4 years
50,000 8 years
Arjen Lemmen
(1)
2,500 1.5 years 3,600
50,000 3 years
4,306 5.5 years
6,328 6 years
695 6.5 years
15,952 7 years
50,000 9 years
16,000 5 years / 10 years
(1)
Andria Wilk
(1)
9,400 3 years 988
9,900 4 years
4,446 5 years / 10 years
(1)
The table below shows the remaining term of the stock opons and restricted stock units held by our senior
management during the year ended December 31, 2021.
The table below shows the stock opons exercised by our senior management during the year ended December 31, 2021
and the exercise price of those stock opons. Per exercised opon, one share was issued.
PART IV
Remuneration Report of the Remuneration and Nomination Committee | 191
Relevant Body Posion
Fees denominated
in USD
Fees denominated
in EUR
Board of Directors Chairperson 76,878 65,000
Member 41,396 35,000
Audit & Complance commiee/R&D Chairperson 17,741 15,000
Member 8,871 7,500
Remuneraon & Nominaon commiee/
Commercial commiee
Chairperson 11,827 10,000
Member 5,913 5,000
190 | Remuneration Report of the Remuneration and Nomination Committee
4.4.3 Remuneration of Non-Executive Directors
The remuneraon of the individual members of the Board of Directors is determined by the Board of Directors, at the
recommendaon of the remuneraon and nominaon commiee, within the limits of the remuneraon policy adopted
by the shareholders at the General Meeng. The descripon below reects the remuneraon policy approved by our
General Meeng held on May 11, 2021.
Pursuant to the remuneraon policy, the remuneraon of the non-execuve directors consists of the following xed
and variable components:
• a xed fee
• if applicable, a fee for chairing the audit and compliance commiee, the research and development commiee or,
the remuneraon and nominaon commiee or the commercial commiee;
• a xed fee for board commiee membership; and
• a long-term variable incenve in the form of stock opons and restricted stock units.
Fixed fee
The Board of Directors has set the annual base remuneraon, the annual remuneraon for members of the audit and
compliance commiee, the research and development commiee, the remuneraon and nominaon commiee and the
commercial commiee and, in each case, the addional remuneraon for the respecve chairperson as follows:
Long-term incenve plan
The Board of Directors intends to incenvize the non-execuve directors by issuing stock opons and/or restricted stock
units from me to me to be able to aract and retain well-qualied non-execuve directors in connecon with the Equi
-
ty Incenve Plan. The Board of Directors grants stock opons and restricted stock units to the non-execuve directors on
the recommendaon of the remuneraon and nominaon commiee. Such stock opon and restricted stock unit grants
are based on an equity incenve grant allocaon scheme established by the Board of Directors pursuant to the Opon
Plan. The condions of our Equity Incenve Plan apply to our non-execuve directors, as set forth in secon 4.4.4 “Long-
Term Incenves Granted to Key Persons – Equity Incenve Plan”.
Success payment
In exceponal circumstances, the Board of Directors may decide to reward a non-execuve director with a success
payment relang to the occurrence of specic events achieved through the exceponal eorts of that person (such as a
plaorm licensing or product licensing deal brokered by that non-execuve director). To date, no such success payments
have been made or promised by us to our non-execuve directors.
Pursuant to the remuneraon policy, in case of a dismissal, non-execuve directors will not be entled to a severance
payment.
The following table sets forth the informaon regarding the compensaon earned by our non-execuve directors during
the year ended December 31, 2021:
(1) These amounts do not reect the actual economic value realized by the non-execuve director. Amount shown represents the expenses with respect to
the stock opon awards granted in 2021 to the non-execuve directors measured using the Black Scholes formula. For a descripon of the assumpons
used in valuing these awards, see note 14 “Share-based payments” to our consolidated nancial statements in chapter 7 “Consolidated Financial
Statements – audited as of and for the years ended December 31, 2021, 2020 and 2019”.
(2) These amounts do not reect the actual economic value realized by the non-execuve director. Amount shown represents the expenses with respect
to the restricted stock unit awards granted in 2021 to the non-execuve directors measured using the Black Scholes formula. For a descripon of the
assumpons used in valuing these awards, see note 14 “Share-based payments” to our consolidated nancial statements in chapter 7 “Consolidated
Financial Statements – audited as of and for the years ended December 31, 2021, 2020 and 2019”.
(3) David L. Lacey resigned from our Board of Directors per May 11, 2021 and was succeeded by Yvonne Greenstreet. On March 3, 2022, Yvonne Greenstreet
stepped down from her posion as member of our Board of Directors.
Name
(in USD)
Fees earned or
paid in cash
Stock opon
awards
(1)
Restricted stock
units awards
(2)
Total
Peter Verhaeghe 91,662 392,743 210,120 694,526
David L. Lacey
(3)
19,712 392,743 210,120 622,576
Werner Lanthaler 65,051 392,743 210,120 667,914
J. Donald deBethizy 62,094 392,743 210,120 664,957
Pamela Klein 50,266 392,743 210,120 653,130
A. A. Rosenberg 56,180 392,743 210,120 659,044
James M. Daly 59,137 392,743 210,120 662,000
Yvonne Greenstreet
(3)
30,459 514,154 260,034 804,647
PART IV
PART VII
How He Found Ways
to Balance Mental and
Physical Health with MG*
Daniel
Growing up, Daniel was always involved in sports and tness, and he eventually
established a career in the eld. When he was diagnosed with myasthenia gravis
(MG), his world was turned upside down.
192 | Patient Story
Patient Story | 193
PART VI
How did you react when you received
your myasthenia gravis diagnosis?
I didn’t really know much about MG, so I didn’t really
know what to think. The only thing I knew about MG was
informaon I gained through my then-girlfriend. Her dad
has MG. Ironically, she had menoned MG when she was
taking me to appointments. He was the only person I
knew living with MG, and he seemed to be living a prey
normal life.
What has changed about your life since
your myasthenia gravis diagnosis, and
what has stayed the same?
For the most part, my life is sll prey normal. Some
things stayed the same, like I’m working full me and
working out ve or six mes a week, although I had to
slowly build back up to using heavier weights. I have
to be careful about not pushing myself too hard, and I
worked with my doctor to gure out what exercises were
right for me. I know not everyone with MG can do as
much as I have been able to do.
But some things certainly did change. I had to start cut
-
ng back on social oungs. My friends noced, but when
I explained it to them, they were understanding. And
I need more sleep than I did before. For me, it’s really
been about nding the right balance of what I want to
do and what I need to do to take care of my body.
What challenges did you face while
continuing to work? Did you have to
set new expectations or modify your
workload or schedule?
I’m very lucky to have the job that I do because I
was able to modify my schedule. I worked with my
manager when my symptoms were really bad. I would
go in when I could. My manager and coworkers knew
that I would do all that I could, so they were understan
-
ding when I needed to come in late or miss a day. When
I had a myasthenia gravis–related surgery, I took some
me o to recover and nd my new balance. When I was
ready to come back, my posion was waing for me.
Patient
Story
PART IV
*Paid contributor to MG United.
194 | Remuneration Report of the Remuneration and Nomination Committee
Remuneration Report of the Remuneration and Nomination Committee | 195
Name
Total stock opons held
on January, 1, 2021
Stock opons
granted in 2021
Stock opons
exercised in 2021
Total stock opons held
on December 31, 2021
Exercise price
(in USD)
Stock opons vested
through 2020
Stock opons vested
through 2021
Stock opons
to vest in 2022
Stock opons
to vest in 2023
Stock opons
to vest in 2024
Peter Verhaeghe 58,595 2,700 2.76 11,626
–
61,2954.47
1,969
8.12
5,000
12.89
10,000
97.77 6,667
3,333
153.75
3,333
3,334
3,333
280.43 3,333
3,334
3,333
350.20 2,700
Total
58,595 2,700 – 61,295 38,595 10,000 6,667 3,333 2,700
David L. Lacey
(1)
67,800 2,700 (5,000) 65,500 8.12 7,800
12.89 10,000
23.98 15,000
97.77 6,667 3,333
153.75 3,333 3,334 3,333
280.43 3,333 3,334 3,333
350.20 2,700
Total
67,800 2,700 (5,000) 65,500 42,800 10,000 6,667 3,333 2,700
Werner Lanthaler 30,000 2,700 (4,420) 28,280 97.77
6,667
3,333
153.75
2,247 3,333
280.43
3,333 3,334 3,333
350.20
2,700
Total
30,000 2,700 (4,420) 28,280 8,914 9,999 3,334 3,333 2,700
J. Donald deBethizy 47,500 2,700 (7,500) 42,700 12.89
10,000
97.77
6,667
3,333
153.75
3,333
3,334
3,333
280.43
3,333
3,334
3,333
350.20
2,700
Total
47,500 2,700 (7,500) 42,700 20,000 10,000 6,667 3,333 2,700
The table below shows the stock opons held at January 1, 2021 and the stock opons granted to the non-execuve
directors which have vested during the year ended December 31, 2021, as well as the stock opons scheduled to vest in
the years ending December 31, 2022, December 31, 2023 and December 31, 2024 (in number of stock opons), and the
respecve exercise price of such stock opons:
PART IV
Remuneration Report of the Remuneration and Nomination Committee | 197196 | Remuneration Report of the Remuneration and Nomination Committee
Name
Total stock opons held
on January, 1, 2021
Stock opons
granted in 2021
Stock opons
exercised in 2021
Total stock opons held
on December 31, 2021
Exercise price
(in USD)
Stock opons vested
through 2020
Stock opons vested
through 2021
Stock opons
to vest in 2022
Stock opons
to vest in 2023
Stock opons
to vest in 2024
Pamela Klein 50,000 2,700 (7,500) 45,200 12.96 2,500
12.89 10,000
97.77 6,667 3,333
153.75 3,333 3,334 3,333
280.43 3,333 3,334 3,333
350.20 2,700
Total
50,000 2,700 (7,500) 45,200 22,500 10,000 6,667 3,333 2,700
A. A. Rosenberg 45,000 2,700 16.00 15,000
(1,160)
46,540 97.77 6,667 3,333
153.75 2,173 3,334 3,333
280.43 3,333 3,334 3,333
350.20 2,700
Total
45,000 2,700 (1,160) 46,540 23,840 10,000 6,667 3,333 2,700
James M. Daly 35,000 2,700 90.97 2,500 2,500
–
37,700 97.77 6,667 3,333
153.75 3,333 3,334 3,333
280.43 3,333 3,334 3,333
350.20 2,700
Total
35,000 2,700 – 37,700 12,500 12,500 6,667 3,333 2,700
Yvonne Greenstreet
(1)
–
4,050
– 4,050 288.93 1350 1350 1350
Total
– 4,050 – 4,050 – – 1,350 1,350 1,350
PART IV
(1) David L. Lacey resigned from our Board of Directors per May 11, 2021 and was succeeded by Yvonne Greenstreet.
On March 3, 2022, Yvonne Greenstreet stepped down from her posion as member of our Board of Directors.
198 | Remuneration Report of the Remuneration and Nomination Committee Remuneration Report of the Remuneration and Nomination Committee | 199
Name
Total restricted stock units
held on January, 1, 2021
Restricted stock units
granted in 2021
Restricted stock units
forfeited in 2021
Restricted stock units
exercised in 2021
Total restricted
stock units held on
December 31, 2021
Restricted stock
units vested
through 2021
Restricted stock
units to vest in
2022
Restricted stock
units to vest in
2023
Restricted stock
units to vest in
2024
Restricted stock
units to vest in
2025
Peter Verhaeghe 150 150 150
–
600 – –
600 –
150 Total 150 150 150
– –
150 600
– 600
–David L. Lacey
(1)
– –
600
– 600
–150 150 150 150
Total 150 150 150
– –
150 600
– 600
–Werner Lanthaler 150 150 150
–
600– –
600–
150Total 150 150 150
– –
150 600
– 600
–J. Donald deBethizy 150 150 150
–
600 – –
600 –
150Total 150 150 150
– –
150 600
– 600
–Pamela Klein 150 150 150
–
600 – –
600 –
150Total 150 150 150
– –
150 600
– 600
–A. A. Rosenberg 150 150 150
– 600 – – 600 –
150Total 150 150 150
– 600 – – 600 –
150James M. Daly 150 150 150
– 600 – – 600 –
150Total 150 150 150
– 600 – – 600 –
150Yvonne Greenstreet
(1)
– –
900
– 900
–225 225 225 225
Total 225 225 225
–
900 – –
900 –
225PART IV
The table below shows the restricted stock units held at January 1, 2021 and the restricted stock units granted to the
non-execuve directors which have vested during the year ended December 31, 2021, as well as the restricted stock units
scheduled to vest in the years ending December 31, 2022, December 31, 2023, December 31, 2024 and December 31,
2025 (in number of restricted stock units):
(1) David L. Lacey resigned from our Board of Directors per May 11, 2021 and was succeeded by Yvonne Greenstreet.
On March 3, 2022, Yvonne Greenstreet stepped down from her posion as member of our Board of Directors.
200 | Remuneration Report of the Remuneration and Nomination Committee
Name
Number of
Stock opons
Remaining term on December
31, 2021 (rounded up)
Number of restricted
stock units
(2)
Peter Verhaeghe 8,741 0.5 years 600
4,854 3 years
5,000 3 years
10,000 4.5 years
10,000 7 years
10,000 8 years
10,000 9 years
2,700 10 years
David L. Lacey
(1)
7,800 3 years 600
10,000 4.5 years
15,000 6 years
10,000 7 years
10,000 8 years
10,000 9 years
2,700 10 years
Werner Lanthaler 10,000 2 years 600
5,580 8 years
10,000 9 years
2,700 10 years
J. Donald deBethizy 10,000 4.5 years 600
10,000 7 years
10,000 8 years
10,000 9 years
2,700 10 years
Pamela Klein 2,500 3.5 years 600
10,000 4.5 years
10,000 7 years
10,000 8 years
10,000 9 years
2,700 10 years
A. A. Rosenberg 15,000 5 years 600
10,000 7 years
8,840 8 years
10,000 9 years
2,700 10 years
Name
Number of
Stock opons
Remaining term on December
31, 2021 (rounded up)
Number of restricted
stock units
James M. Daly 5,000 6.5 years 600
10,000 7 years
10,000 8 years
10,000 9 years
2,700 10 years
Yvonne Greenstreet 4,050 10 years 900
The table below shows the remaining term of the stock opons and restricted stock units held by the non-execuve
directors during the year ended December 31, 2021.
Remuneration Report of the Remuneration and Nomination Committee | 201
Name
Number of
Stock opons
Exercise price
(in USD)
Peter Verhaeghe – –
David L. Lacey
(1)
5,000 8.12
Werner Lanthaler 4,420 153.75
J. Donald deBethizy 7,500 12.96
Pamela Klein 7,500 12.96
A. A. Rosenberg 1,160 153.75
James M. Daly – –
Yvonne Greenstreet
(1)
– –
Total
25,580
The table below shows the stock opons exercised by our non-execuve directors during the year ended December 31,
2021 and the exercise price of those stock opons. Per exercised opon, one share was issued.
4.4.4 Long-Term Incentives Granted to Key Persons – Equity Incentive Plan
Our current equity incenve plan providing for the granng of a mix of stock opons and restricted stock units was
approved by our Board of Directors on March 15, 2021 and subsequently amended on December 15, 2021 (the
Equity
Incenve Plan
). The aim of the Equity Incenve Plan is to encourage our senior management, directors, all other key
employees, and key outside consultants and advisors to acquire an economic and benecial ownership interest in the
growth and performance of argenx, to increase their incenve to contribute to our value and to aract and retain individ
-
uals who are key to argenx.
In connecon with the Equity Incenve Plan, our Board of Directors has also established an equity incenve allocaon scheme.
The equity incenve allocaon scheme contains (i) the date on which stock opons and restricted stock units are granted each
year, which shall be the same date each year and (ii) the number of stock opons and restricted stock units granted to each
person or to each group of persons, which shall be based on objecve criteria only. Starng January 1, 2023, the regular annual
grant of equity incenves to exisng employees will be once a year in July for all parcipants of the Equity Incenve Plan.
Our Board of Directors, in each case subject to the approval of the majority of the non-execuve directors, may grant
stock opons and restricted stock units to our senior management, directors, all other key employees, or key outside
PART IV
(1) David L. Lacey resigned from our Board of Directors per May 11, 2021 and was succeeded by Yvonne Greenstreet. On March 3, 2022,
Yvonne Greenstreet stepped down from her posion as member of our Board of Directors.
(2) In accordance with the equity plan, restricted stock units, once vested, will be seled against the issuance of ordinary shares in argenx SE.
Such shares have no expiry date and may be held by the parcipant without limitaon
(1) David L. Lacey resigned from our Board of Directors per May 11, 2021 and was succeeded by Yvonne Greenstreet. On March 3, 2022,
Yvonne Greenstreet stepped down from her posion as member of our Board of Directors.
202 | Risk Appetite & Control Risk Appetite & Control | 203
IN THIS SECTION WE WILL MAKE THE REQUIRED DISCLOSURES REGARDING OUR RISK APPETITE
AND MITIGATING ACTIONS. THE RISK MITIGATION ACTIONS AND RISK MANAGEMENT DESCRIBED
IN THIS SECTION HAVE BEEN FULLY TAKEN INTO ACCOUNT BY US WHEN PREPARING THE DE
-
SCRIPTION OF THE MAIN RISKS AND UNCERTAINTIES WE FACE, AS SET OUT IN SECTION 2 ”
RISK
FACTORS
”. ANY MITIGATING LANGUAGE USED IN THIS SECTION DOES NOT HAVE ANY IMPACT ON
THE RISKS AND UNCERTAINTIES WE FACE OR THEIR POTENTIAL ADVERSE EFFECTS AS THEY ARE
DESCRIBED IN SECTION 2 “
RISK FACTORS
”.
SECTION 2 “
RISK FACTORS
” DESCRIBES THE MAIN RISKS AND UNCERTAINTIES WE FACE ALREADY
FULLY HAVING TAKEN INTO ACCOUNT OUR RISK MANAGEMENT AND THE RISK MITIGATING AC
-
TIONS DESCRIBED HEREIN.
4.5.1 Introduction
This Universal Registraon Document, in applicaon of arcle 9 sub 12 of the Prospectus Regulaon contains (whether in
the body of the document or in the documents incorporated by reference) the informaon required for us to be dis
-
closed in our annual nancial reporng and as such also serves as our annual report for the nancial year 2021.
Under Dutch law, we are required to include in our annual report a general descripon of our willingness to migate the
risks and uncertaines we face (also called our ‘risk appete’), and to give a descripon of the migang acons we have
taken with regard to our most relevant risks.
RISK FACTOR MEASURES TAKEN TO CONTROL THESE RISKS
We have incurred signicant losses since our incepon and expect
to incur losses for the foreseeable future. We may never achieve
or maintain protability. All but one of our product candidates are
either in preclinical, early-stage clinical or clinical development
or market approval has been requested for them, but has not
(yet) been granted, and only VYVGART™ for the treatment of
gMG has obtained regulatory approval in the U.S. and in Japan.
Our trials may fail and even if they succeed we may be unable to
commercialize any or all of our product candidates due to a lack
of, or delay in, regulatory approval or for other reasons.
We have adopted a business model and strategic porolio
management approach to spread risks over wholly-owned
programs as well as partnered programs, and to manage risks
within our own proprietary product candidates pipeline. We
connue to create novel, dierenated product candidates from
our proprietary technology plaorms which regularly feed our
product candidate pipeline.
We will face signicant challenges in successfully
commercializing our products.
We plan to focus on the development and commercializaon
of the product candidates that we believe have a clear clinical
and regulatory approval pathway and that we believe we
can commercialize successfully, when and if approved. Our
commercializaon strategy for any product candidates that
are approved will focus on key academic centers, specialist
physicians and advocacy groups, as well as on providing paents
with support programs and maximizing product access and
reimbursement. We plan to partner product candidates that
we believe have promising ulity in disease areas or paent
populaons that are beer served by the resources of larger
biopharmaceucal companies.
Nearly all aspects of our acvies are subject to substanal
regulaon. No assurance can be given that any of our product
candidates will fulll regulatory compliance. Failure to comply
with such regulaons could result in delays, suspension, refusals
and withdrawal of approvals, as well as nes.
We are establishing a robust quality management system to
ensure compliance with current good laboratory pracces,
current good manufacturing pracces and current good clinical
pracces. We endeavor to stay abreast of changes to legislaon
and to ensure compliance. We have strengthened our team
by establishing an in-house quality assurance department to
ensure compliance. Experts at the EMA and FDA, as well as
its consultants and CROs. We strive to develop good working
relaonships with regulators to ensure alignment on the selected
clinical development and regulatory pathways to ensure opmal
regulatory eciencies are achieved. Furthermore, we seek
to maintain a deep product candidate pipeline to allow us to
potenally avoid being too dependent on the success of a single
asset.
Nearly all aspects of our acvies are subject to substanal
regulaon. No assurance can be given that any of our product
candidates will full regulatory compliance. Failure to comply
with such regulaons could result in delays, suspension, refusals
and withdrawal of approvals, as well as nes.
We have established a robust quality management system to
ensure compliance with current GLP, cGMP and current GCP. We
endeavor to stay abreast of changes to legislaon and to ensure
compliance. We have strengthened our team by establishing an
in-house quality assurance team to ensure compliance. We strive
to develop good working relaonships with regulators to ensure
alignment on the selected clinical development and regulatory
pathways to ensure opmal regulatory eciencies are achieved.
Furthermore, we seek to maintain a deep product candidate
pipeline to allow us to potenally avoid being too dependent on
the success of a single asset.
PART IV
consultants or advisors and in accordance with the equity incenve allocaon scheme. Our Board of Directors may also
grant stock opons and restricted stock units at its discreon outside of the equity incenve allocaon scheme, but only
in a period when no inside informaon (as specied in our insider trading policy) is available. Persons to whom equity
incenves are granted cannot refuse to accept such equity incenves.
The aggregate number of shares that may be available for the issuance of stock opons and restricted stock units is
based between the 50
th
and the 75
th
percenle of our reference group.
Stock opons granted pursuant to the Equity Incenve Plan shall vest with respect to one third of the shares upon the rst
anniversary of the date of grant, with the remaining two thirds vesng in twenty-four equal monthly instalments with the
stock opon fully vesng upon the third anniversary of the date of grant, subject, in each case, to the oponee’s connued
status. Stock opons are exercisable when vested, and in any case not aer the stock opon expiraon date included in each
individual stock opon grant, which is (at the elecon of the oponee) either ve years or ten years from the date of grant.
Each stock opon shall be granted with an exercise price equal to the fair market value upon the date of grant and shall
have a term equal to ve or ten years from the date of grant. Oponees may prefer to elect the ve year period as this
may limit their personal tax obligaons in respect of the opon in respect to the jurisdicon where opons are taxed at
grant, compared to a ten year opon.
Restricted stock units granted under the Equity Incenve Plan shall vest over a period of four years with repect to one fourth
of the shares upon each anniversary of the date of grant. At the me of vesng, the holder of such restricted stock unit
receives argenx shares for free in the number equal to the number of restricted stock units vested minus a certain number
of shares required to cover employee taxes payable by argenx on behalf of the holder of restricted stock units, if applicable.
In the case of a (i) sale, merger, consolidaon, tender oer or similar acquision of shares or other transacon or series of
related transacons as a result of which a change in control occurs, (ii) sale or other disposion of all or substanally all of
argenx’s assets or (iii) dissoluon and/or liquidaon of argenx, then 100% of any unvested equity incenves shall vest.
Our Board of Directors, upon approval of a majority of the non-execuve directors, may amend or terminate the Equity
Incenve Plan or may amend the terms of this Equity Incenve Plan, also for any outstanding stock opons or restricted
stock units, provided that we will compensate any aected oponee for any direct negave impact of such amendment.
4.5 Risk Appetite & Control
As a Dutch comefore reading this secon, please carefully review the following cauonary statement:
204 | Risk Appetite & Control
RISK FACTOR MEASURES TAKEN TO CONTROL THESE RISKS
We rely, and expect to connue to rely, on third pares, including
independent clinical invesgators and CROs, to conduct our
preclinical studies and clinical trials. If these third pares do not
successfully carry out their contractual dues or meet expected
deadlines, we may not be able to obtain regulatory approval for
or commercialize our product candidates and our business could
be substanally harmed.
We endeavor to meet our contractual obligaons and any relevant
milestone achievements under our collaboraon contracts. We
endeavor to maintain a rich pipeline of possible collaboraon
partners as well as a good relaonship with exisng and potenal
future collaboraon partners in order to limit reliance on a limited
number of collaboraon partners. Furthermore, third-party
contractor selecon and management is subject to our quality
management system. Customary contractual agreements are
put in place in an eort to protect us from under-performance.
We are typically spreading operaonal risks over various service
providers. Project management belongs to our core internal
competences.
We rely on patents and other intellectual property rights to
protect our product candidates and plaorm technologies.
Failure to enforce or protect these rights adequately could harm
our ability to compete and impair our business.
We le and prosecute patent applicaons to protect our
product candidates and technologies. We are doing this in close
collaboraon with leading expert rms in the eld of intellectual
property protecon. In order to protect trade secrets, we maintain
strict condenality standards and agreements with collaborang
pares. We regularly monitor third-party intellectual property
rights within our relevant elds and jurisdicons to avoid violang
any third-party rights and secures licenses to such third-party
rights on a need-to basis.
Our future growth and ability to compete depends on retaining
our key personnel and recruing addional qualied personnel.
We oer compeve remuneraon packages and share based
incenves in the form of the Equity Incenve Plan. We perform
periodicalperiodic benchmark analyses with an external service
provider to ensure the compeveness of the compensaon
oered to our key personnel in comparison to other (peer group)
companies. We pay close aenon to creang an environment that
supports the further development of the talents of our key people.
4.5.2 General Description of Our Risk Appetite
Our risk appete serves as a guideline for us in deciding which measures we may take in migang some of the risks and
uncertaines we face. Our risk appete is aligned with our strategy and priories. The business we operate in is inherent
-
ly high-risk. In general, we are willing, and in our view required, to take signicant risks to be able to operate successfully
in our line of business. Some of the risks and uncertaines we face are enrely outside of our control whereas others
may be inuenced or migated.
4.5.3 Controlling Actions Taken by Us with Regard to Our Most Relevant
Risks and Uncertainties
As required by Clause 2:391 sub 1 of the Dutch Civil Code in conjuncon with Guideline 400.1.110c on Annual Reporng,
the following is a descripon of the main risks and uncertaines we face (being the rst risk of each category of risk fac
-
tors set out in secon 2 “Risk Factors”) and a descripon of the measures we took to control them. A descripon of the
expected impact upon materializaon of these risks is included for each risk in secon 2 “Risk Factors”.
4.5.4 Material Impact of Risk Materialization in 2021
idened any material impact on argenx as a result of materializaon of previously idened risks and uncertaines.
As set out in secon 2.2.2 “Business interrupons resulng from the COVID-19 pandemic could cause a disrupon of the
development of our products and product candidates and adversely impact our business.”, we are monitoring the impact of
the COVID-19 pandemic on our operaons. We conduct our clinical trials globally, including in areas impacted by COVID-19
in North America, Europe and Japan. The connued spread of COVID-19 has and could connue to adversely impact our
business and operaons, including our or our third party partners’ discovery acvies, preclinical studies and clinical trials.
4.5.5 Financial Risks and Controls
In running our business, we seek to implement a sustainable policy regarding internal control and risk management. Our
Board of Directors has delegated an acve role to its audit and compliance commiee in the design, implementaon and
monitoring of an internal risk management and control system to manage the signicant risks to which we are exposed.
Our nancial reporng is structured within a ght framework of budgeng, reporng and forecasng. A disncon is
made between reports for internal and external use. External reporng at group level consists of an annual report (in
the form of this Universal Registraon Document), including nancial statements audited by the independent auditor, as
well semi-annual reporng and quarterly updates, containing summarized nancial informaon. The external reports are
based on the internal nancial reporng.
Internal nancial reporng consists of extensive consolidated monthly reports in which current developments are com
-
pared to the monthly (cumulave) budgets and previous forecasts. In addion, each quarter we reiterate or update our
forecast for the annual results, including the cash ow posion at the end of the nancial year. The quarterly budgets are
part of the annual group budget, which is prepared every year by our senior management and approved by our Board
of Directors. Our specialized nance and administraon department are primarily responsible for evaluang the dra
internal and external reporng, before these are nally approved by our Board of Directors.
Our Board of Directors discusses the nancial results of the group at all formal board meengs, which meengs are minuted.
argenx’s internal controls over nancial reporng are a subset of internal controls and include those policies and proce
-
dures that:
• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reect the transacons and dis
-
posions of the assets of argenx;
• provide reasonable assurance that transacons are recorded as necessary to permit preparaon of nancial state
-
ments in accordance with IFRS as issued by the Internaonal Accounng Standards Board and as adopted by the EU,
and that receipts and expenditures of argenx are being made only by authorized persons; and
• provide reasonable assurance regarding prevenon or mely detecon of unauthorized acquision, use or disposion
of argenx’s assets that could have a material eect on the nancial statements.
Since argenx has securies registered with the U.S. Securies and Exchange Commission (
SEC
) and is a large accelerated ler within the meaning of Rule 12b-2 of the U.S. Securies Exchange Act of 1934, argenx needs to assess the eecve
-
ness of the internal controls over nancial reporng and provide a report on the results of this assessment. Our Board
of Directors reviewed its internal controls over nancial reporng based on criteria established in the Internal Control –
Integrated Framework (2013) issued by the Commiee of Sponsoring Organizaons of the Treadway Commission (
COSO
)
and engaged an external advisor to help assess the eecveness of those controls.
4.5.6 Recent or Current Developments in our System of Risk Management
In 2021, we have further increased our aenon to pro-acve risk management by making the evaluaon of argenx’s
core risks and uncertaines a standing discussion topic at our Board of Directors.
PART IV
Risk Appetite & Control | 205
5
PART V
General description
of the Company and
it’s Share Capital
Contents
5.1 Legal Informaon on the Company 208
5.2 Share Capital 209
5.3 Share Classes and Principal Shareholders 216
5.4 General meeng of Shareholders and Vong Rights 217
5.5 An-Takeover Provisions 218
5.6 Amendments of Arcles of Associaon 218
5.7 Obligaons of Shareholders and Members of the 219
5.8 Short Posions 220
5.9 Market Abuse Regime 220
5.10 Transparency Direcve 221
5.11 Dutch Financial Reporng Supervision Act 221
5.12 Dividends and Other Distribuons 221
5.13 Financial Calendar 2022 222
5 General description
of the Company and
its Share Capital
5.1 Legal Information
on the Company
5.1.1 General
We were incorporated on April 25, 2008 in the Netherlands and under Dutch law. Our commercial name is ‘argenx’ and
since April 26, 2017, our corporate name is ‘argenx SE’. We are a Dutch European public company (
Societas Europaea
or
SE
) registered with the trade register of the Dutch Chamber of Commerce under number 24435214. Our corporate seat is
in Roerdam, the Netherlands, and our registered oce is at Willemstraat 5, 4811 AH, Breda, the Netherlands. Our tele
-
phone number is +31 (0) 10 70 38 441. Our website address is hp://www.argenx.com. Informaon on the website does
not form part of this Universal Registraon Document and has not been scrunized or approved by the AFM, unless that
informaon is incorporated by reference into this Universal Registraon Document (see also 9 “Informaon incorporated
by reference”).
Our European legal enty idener number (
LEI
) is 7245009C5FZE6G9ODQ71. Our ordinary shares are listed on Euronext Brussels under ISIN Code NL0010832176 under the symbol “ARGX”. The ADSs are listed on Nasdaq, under the symbol “ARGX”.
5.1.2 Statutory / Corporate Objects
Pursuant to Arcle 3 of our Arcles of Associaon, our corporate objects are: (a) to exploit, including all acvies relang
to research, development, producon, markeng and commercial exploitaon; biological, chemical or other products,
processes and technologies in the life sciences sector in general, and more specically in the diagnosc, pharmaceucal,
medical, cosmec, chemical and agricultural sector; (b) to design and develop instruments which may be used in medical
diagnosis and aliated areas; (c) the worldwide distribuon of, sale of and rendering services relang to our products
and subsidiaries directly to customers as well as through third pares; (d) to incorporate, to parcipate in any way what
-
soever, to manage, to supervise, to operate and to promote enterprises, businesses and companies; (e) to render advice
and services to businesses and companies with which we form a group and to third pares; (f) to nance businesses and
companies; (g) to borrow, to lend and to raise funds, including the issue of bonds, promissory notes or other securies
or evidence of indebtedness as well as to enter into agreements in connecon with the aforemenoned; (h) to render
guarantees, to bind us and to pledge our assets for obligaons of the companies and enterprises with which we form a
group and on behalf of third pares; (i) to obtain, alienate, manage and exploit registered property and items of prop
-
erty in general; (j) to trade in currencies, securies and items of property in general; (k) to develop and trade in patents,
trademarks, licenses, know-how and other industrial property rights; and (l) to perform any and all acvies of industrial,
nancial or commercial nature, as well as everything pertaining the foregoing, relang thereto or conducve thereto, all
in the widest sense of the word.
5.2 Share Capital
5.2.1 Authorized and Issued Share Capital
Under Dutch Law (Secon 2:67 of the DCC), a company’s authorized share capital sets out the maximum amount and
number of shares that it may issue without amending its arcles of associaon. Our Arcles of Associaon provide for an
authorized share capital in the amount of €9 million divided into 90 million shares, each with a nominal value of €0.10.
All issued and outstanding shares have been fully paid up and the shares are held in dematerialized form.
As of March 1, 2022 our issued and paid up share capital amounted to €5,190,530.8, represented by 51,905,308 ordinary
shares with a nominal value of €0.10, each represenng an idencal fracon of our share capital. As of March 1, 2022,
neither we nor any of our subsidiaries held any of our own shares.
5.2.2 Stock Options and Restricted Stock Units
In addion to the shares already outstanding, we have granted stock opons which upon exercise will lead to an increase
in the number of our outstanding shares. A total of 5,619,113 stock opons (where each stock opon entles the holder
to subscribe for one new ordinary share) were outstanding and granted as of December 31, 2021. Upon exercise of these
5,619,113 stock opons, a total amount of $923.4 million in stock opon exercise price would become payable to argenx
by the oponees, increasing the argenx’s share capital and share premium by the same amount. A total of 5,373,997 stock
opons (where each stock opon entles the holder to subscribe for one new ordinary share) were outstanding and grant
-
ed as of March 1, 2022. Upon exercise of these 5,373,997 stock opons, a total amount of $910.4 million in opon exercise
price would become payable to argenx by the oponees, increasing argenx’s share capital by the same amount.
Further, we have granted restricted stock units which upon exercise will lead to an increase in the number of our out
-
standing shares. A total of 212,253 restricted stock units (where the holder receives restricted stock units receives the
equal number of new ordinary shares, minus a certain number of shares required to cover certain costs, if applicable)
were outstanding and granted as of December 31, 2021. A total of 212,253 restricted stock units (where the holder
receives restricted stock units receives the equal number of new ordinary shares, minus a certain number of shares
required to cover certain costs, if applicable) were outstanding and granted as of March 1, 2022.
Apart from the stock opons and restricted stock units granted under the argenx Equity Incenve Plan, we do not
currently have other stock opons, restricted stock units, opons to purchase securies, converble securies or other
rights to subscribe for or purchase securies outstanding. For stock opon informaon through December 31, 2021, see
note 14 “Share-based payments” in our consolidated nancial statements in secon 7 “Consolidated Financial State
-
ments – audited as of and for the years ended December 31, 2021, 2020 and 2019”.
5.2.3 History of Share Capital
New shares created during 2019
As a result of the exercise of opons under the Equity Incenve Plan, 419,317 new shares were created in 2019.
On January 18, 2019, Johnson & Johnson Innovaon JJDC, Inc. purchased 1,766,899 of our ordinary shares at a price of
€100.02 per share, totaling €176.7 million, as part of a broader license and collaboraon arrangement further described
in 1.4.7 “Our Strategic Partnership with Janssen for cusatuzumab”. The shareholding of Johnson & Johnson Innovaon at
the me of the issuance represented approximately 4.68% of our outstanding shares.
On November 7, 2019, we oered 4,000,000 of our ordinary shares through a global oering which consisted of (i) a pub
-
lic oering of 2,010,057 ADSs in the U.S. and certain other countries outside the EEA at a price of $121.00 per ADS, be
-
fore underwring discounts and commissions and oering expenses; and (ii) a concurrent private placement of 2,589,943
208 | Legal Information on the Company Share Capital | 209
PART V
of ordinary shares in the EEA at an oering price of €109.18 per share, before underwring discounts and commissions
and oering expenses. On November 8, 2019, the underwriters of the oering exercised their over-allotment opon to
purchase 600,000 addional ADSs in full. As a result, we received $556.3 million of gross proceeds from this oering,
decreased by $25.7 million of underwriter discounts and commissions, and oering expenses, of which $25.5 million has
been deducted from equity. The total net cash proceeds from the oering amounted to $530.6 million.
As a result of these developments, argenx’s share capital increased from 35,975,312 shares as of January 1, 2019 to
42,761,528 shares as of December 31, 2019.
New shares created during 2020
As a result of the exercise of opons under the Equity Incenve Plan, 602,461 new shares were created in 2020.
On May 28, 2020, we oered 3,658,515 of our ordinary shares through a global oering which consisted of (i) a public
oering of 2,584,138 ADSs in the U.S. and certain other countries outside the EEA at a price of $205.00 per ADS, before
underwring discounts and commissions and oering expenses; and (ii) a concurrent private placement of 1,074,377
ordinary shares in the EEA at an oering price of €186.52 per share, before underwring discounts and commissions and
oering expenses. On May 29, 2020, the underwriters of the oering exercised their over-allotment opon to purchase
548,777 addional ADSs in full. As a result, we received $872.3 million of gross proceeds from this oering, decreased by
$52.7 million of underwriter discounts and commissions, and oering expenses, of which $52.7 million has been deduct
-
ed from equity. The total net cash proceeds from the oering amounted to $813.3 million.
As a result of these developments, argenx’s share capital increased from 42,761,528 shares as of January 1, 2020 to
47,571,283 shares as of December 31, 2020.
New shares created during 2021
As a result of the exercise of opons under the Equity Incenve Plan, 503,282 new shares were created in 2021.
On February 2, 2021, we oered 3,125,000 of our ordinary shares through a global oering which consisted of (i) a public
oering of 1,608,000 ADSs in the U.S. and certain other countries outside the EEA at a price of $320.00 per ADS, before
underwring discounts and commissions and oering expenses; and (ii) a concurrent private placement of 1,517,000
ordinary shares in the EEA at an oering price of €265.69 per share, before underwring discounts and commissions
and oering expenses. On February 4, 2021, the underwriters of the oering exercised their over-allotment opon to
purchase 468,750 addional ADSs in full. As a result, we received $1,146.7 million of gross proceeds from this oering,
decreased by $56.0 million of underwriter discounts and commissions, and oering expenses, of which $56.0 million has
been deducted from equity. The total net cash proceeds from the oering amounted to $1,090.1 million.
5.2.4 American Depository Shares
In connecon with our IPO on Nasdaq, the Bank of New York Mellon, as depositary, registered and delivered American
Depositary Shares, also referred to as ADSs. Each ADS represents one share (or a right to receive one share) deposited
with ING Bank N.V., as custodian for the depositary in the Netherlands. Each ADS also represents any other securies,
cash or other property which may be held by the depositary. The depositary’s oce at which the ADSs are administered
is located at 101 Barclay Street, New York, New York 10286. The Bank of New York Mellon’s principal execuve oce is
located at 225 Liberty Street, New York, New York 10286.
An ADS holder will not be treated as one of our shareholders and does not have shareholder rights. Dutch law governs
shareholder rights. The depositary will be the holder of the shares underlying the ADSs. A registered holder of ADSs
has ADS holder rights. A deposit agreement among us, the depositary, ADS holders and all other persons indirectly or
benecially holding ADSs sets out ADS holder rights as well as the rights and obligaons of the depositary. New York law
governs the deposit agreement and the ADSs.
The depositary has agreed to pay or distribute to ADS holders the cash dividends or other distribuons it or the custodian
receives on shares or other deposited securies, upon payment or deducon of its fees and expenses. ADS holders will
receive these distribuons in proporon to the number of shares their ADSs represent. An ADS holder may surrender
his ADSs at the depositary’s oce. Upon payment of its fees and expenses and of any taxes or charges, such as stamp
taxes or stock transfer taxes or fees, the depositary will deliver the shares and any other deposited securies underlying
the ADSs to the ADS holder or a person the ADS holder designates at the oce of the custodian. Or, at an ADS holder’s
request, risk and expense, the depositary will deliver the deposited securies at its oce, if feasible.
The depositary may charge the ADS holder a fee and its expenses for instrucng the custodian regarding delivery of
deposited securies. ADS holders may instruct the depositary how to vote the number of deposited shares their ADSs
210 | Share Capital Share Capital | 211
PART V
Number of shares outstanding on December 31, 2019 42,761,528
Number of shares outstanding on December 31, 2020 47,571,283
Exercise of opons in January 2021 108,785
Exercise of opons in February 2021 21,184
Global oering on Nasdaq and Euronext on February 2, 2021 3,125,000
Over-allotment opon exercised by underwriters on February 4, 2021 468,750
Exercise of opons in March 2021 16,398
Exercise of opons in April 2021 2,244
Exercise of opons in May 2021 19,152
Exercise of opons in June 2021 65,867
Exercise of opons in July 2021 41,069
Exercise of opons in August 2021 56,394
Exercise of opons in September 2021 18,895
Exercise of opons in October 2021 1,029
Exercise of opons in November 2021 13,581
Exercise of opons in December 2021 138,684
Number of shares outstanding on December 31, 2021 51,668,315
Exercise of opons in January 2022 236,593
Exercise of opons in February 2022 400
Number of shares outstanding on March 1, 2022
51,905,308
The following table shows the developments in our share capital for the nancial years 2021 and 2022 up to March 1, 2022:
represent. If we request the depositary to solicit the ADS holders’ vong instrucons (and we are not required to do so),
the depositary will nofy them of a General Meeng and send or make vong materials available to them. Those mate
-
rials will describe the maers to be voted on and explain how ADS holders may instruct the depositary how to vote. For
instrucons to be valid, they must reach the depositary by a date set by the depositary. The depositary will try, as far as
praccal, subject to Dutch law and the provisions of our Arcles of Associaon or similar documents, to vote or to have
its agents vote the shares or other deposited securies as instructed by ADS holders. If we do not request the deposi
-
tary to solicit the ADS holders’ vong instrucons, an ADS holder can sll send vong instrucons, and, in that case, the
depositary may try to vote as he instructs, but it is not required to do so. In any event, the depositary will not exercise
any discreon in vong deposited securies and it will only vote or aempt to vote as instructed or as described in the
following sentence. If we asked the depositary to solicit an ADS holder’s instrucons at least 45 days before the meeng
date but the depositary does not receive vong instrucons from an ADS holder by the specied date, it will consider
such ADS holder to have authorized and directed it to give a discreonary proxy to a person designated by us to vote the
number of deposited securies represented by its ADSs. The depositary will give a discreonary proxy in those circum
-
stances to vote on all quesons to be voted upon unless we nofy the depositary that:
• we do not wish to receive a discreonary proxy;
• there is substanal shareholder opposion to the parcular queson; or
• the parcular queson would have an adverse impact on our shareholders.
We are required to nofy the depositary if one of the condions specied above exists. In order to give an ADS holder a
reasonable opportunity to instruct the depositary as to the exercise of vong rights relang to our shares, if we request
the depositary to act, we agree to give the depositary noce of any meeng and details concerning the maers to be
voted upon at least 30 days in advance of the meeng date.
5.2.5 Issue of Shares
The Arcles of Associaon provide that shares may be issued or rights to subscribe for our shares may be granted pur
-
su¬ant to a resoluon of the shareholders at the General Meeng, or alternavely, by our Board of Directors if so designat
-
ed by the shareholders at the General Meeng. A resoluon of the shareholders at the General Meeng to issue shares,
to grant rights to subscribe for shares or to designate our Board of Directors as the corporate body authorized to do so can
only take place at the proposal of our Board of Directors with the consent of the majority of the non-execuve directors.
Shares may be issued or rights to subscribe for shares may be granted by resoluon of our Board of Directors, if and inso
-
far as our Board of Directors is designated to do so by the shareholders at the General Meeng. Designaon by resoluon
of the shareholders at the General Meeng cannot be withdrawn unless determined otherwise at the me of designaon.
The scope and duraon of our Board of Directors’ authority to issue shares or grant rights to subscribe for shares (such
as granng stock opons or issuing converble bonds) is determined by a resoluon of the shareholders at the General
Meeng and relates, at the most, to all unissued shares in argenx’s authorized capital at the relevant me. The duraon of
this authority may not exceed a period of ve years. Designaon of our Board of Directors as the body authorized to issue
shares or grant rights to subscribe for shares may be extended by a resoluon of the shareholders at the General Meeng
for a period not exceeding ve years in each case. The number of shares that may be issued is determined at the me of
designaon. No shareholders’ resoluon or Board of Directors’ resoluon is required to issue shares pursuant to the exer
-
cise of a previously granted right to subscribe for shares. A resoluon of our Board of Directors to issue shares and to grant
rights to subscribe for shares can only be taken with the consent of the majority of the non-execuve directors.
On May 11, 2021, the shareholders at the General Meeng designated our Board of Directors as the corporate body
competent to issue addional shares and grant rights to subscribe for shares up to a maximum of 10% of the outstanding
capital at the date of the general meeng, and to limit or exclude pre-empve rights of shareholders for such shares with
the prior consent of the majority of the non-execuve directors for a period of 18 months.
5.2.6 Pre-Emption Rights
Dutch law (Secon 2:96a of the DCC) and the Arcles of Associaon give shareholders pre-empve rights to subscribe on
a pro rata basis for any issue of new shares or, upon a grant of rights, to subscribe for shares. Holders of shares have no
pre-empve rights upon (1) the issue of shares against a payment in kind (being a contribuon other than in cash); (2)
the issue of shares to our employees or the employees of a member of our group; and (3) the issue of shares to persons
exercising a previously granted right to subscribe for shares.
A shareholder may exercise pre-empve rights during a period of at least two weeks from the date of the announcement
of the issue of shares. Pursuant to the Arcles of Associaon, the shareholders at the General Meeng may restrict or
exclude the pre-empve rights of shareholders. A resoluon of the shareholders at the General Meeng to restrict or ex
-
clude the pre-empve rights or to designate our Board of Directors as our corporate body authorized to do so, may only
be adopted on the proposal of our Board of Directors with the consent of the majority of the non-execuve directors.
A resoluon of the shareholders at the General Meeng to exclude or restrict pre-empve rights, or to authorize our
Board of Directors to exclude or restrict pre-empve rights, requires a majority of at least two-thirds of the votes cast,
if less than 50% of our issued and outstanding share capital is present or represented at the General Meeng.
With respect to an issuance of shares pursuant to a resoluon of our Board of Directors, the pre-empve rights of
shareholders may be restricted or excluded by resoluon of our Board of Directors if and insofar as our Board of Directors
is designated to do so by the shareholders at the General Meeng. A resoluon of our Board of Directors to restrict or
exclude pre-empve rights can only be taken with the consent of the majority of the non-execuve directors.
The designaon of our Board of Directors as the body competent to restrict or exclude the pre-empve rights may be
extended by a resoluon of the shareholders at the General Meeng for a period not exceeding ve years in each case.
Designaon by resoluon of the shareholders at the General Meeng cannot be withdrawn unless determined otherwise
at the me of designaon.
See also 5.2.5 “Issue of Shares” with respect to the current right of the Board of Directors to limit or exclude
pre-empve rights.
5.2.7 Acquisition of Shares in argenx’s Capital
We may not subscribe for our own shares on issue. We may acquire fully paid-up shares at any time for no consider
-
ation or, if:
• our shareholders’ equity less the payment required to make the acquision, does not fall below the sum of called-up
and paid-in share capital and any statutory reserves;
• we and our subsidiaries would thereaer not hold shares or hold a pledge over shares with an aggregate nominal
value exceeding 50% of our issued share capital; and
• our Board of Directors has been authorized thereto by the shareholders at the General Meeng.
As part of the authorizaon, the shareholders at the General Meeng must specify the number of shares that may be
repurchased, the manner in which the shares may be acquired and the price range within which the shares may be
acquired. An authorizaon by the shareholders at the General Meeng to our Board of Directors for the repurchase of
shares can be granted for a maximum period of 18 months. No authorizaon of the shareholders at the General Meeng
is required if ordinary shares are acquired by us with the intenon of transferring such ordinary shares to our employees
under the Equity Incenve Plan. A resoluon of our Board of Directors to repurchase shares can only be taken with the
consent of the majority of the non-execuve directors.
Shares held by us in our own share capital do not carry a right to any distribuon. Furthermore, no vong rights may
be exercised for any of the shares held by us or our subsidiaries unless such shares a are subject to the right of usufruct
PART V
212 | Share Capital Share Capital | 213
PART VII
This is the story of
Lisa Ann from Boston,
New York
Lisa Ann
Lisa Ann was working as an owner of a small photography rm in Saratoga
Springs, New York when she had her rst autoimmune aack.
214 | Patient Story
Patient Story | 215
PART VI
Since geng sick, Lisa Ann has spent a lot of me with
other people diagnosed with pemphigus vulgaris. In
these conversaons, she also hears about the emoonal
stress for caregivers, which Lisa has not had to consider
in her disease journey. Lisa Ann discusses her experience
in tackling the disease without a regular caregiver:
“I didn‘t have a caregiver, so I didn‘t have to worry about
somebody else‘s emoonal connecon. I didn‘t have so
-
mebody forcing me to get out of bed and go to work. If I
didn‘t want to put clothes on because my whole back was
raw, and a lot of my front was raw, that was ne. I kind of
see it as an advantage that I lived alone, that I was able
to not pull anybody into this drama.”
Live today, not in the future.
Finally having the pemphigus vulgaris diagnosis has led
to some big changes in Lisa Ann’s life, including a new
perspecve on how she wants to live her life aer many
years of leng her symptoms and disease drive her de
-
cisions. Here is what she had to say on her ‘carpe diem’
atude:
“You know, there‘s a dierence between living your life
the way you want to live it and living in fear all the me.
I choose to live my life, which includes geng on the
motorcycle and going and feeling that wind in my face
and feeling the sun on my body. I choose to live this way
because I could have died in my bedroom with half of my
skin. I could have died on my bathroom oor but I didn‘t.
I choose to live today, not in the future.“
Patient
Story
or to a pledge in favor of a person other than us or its subsidiaries and the vong rights were vested in the pledgee or
usufructuary before us or its subsidiaries acquired such shares. Neither we nor our subsidiaries may exercise vong rights
in respect of shares for which we or our subsidiaries have a right of usufruct or a pledge.
5.2.8 Reduction of Share Capital
The shareholders at the General Meeng may, upon a proposal of our Board of Directors with the consent of the ma
-
jority of the non-execuve directors, resolve to reduce the issued share capital by cancelling shares or by amending the
Arcles of Associaon to reduce the nominal value of the shares. Only shares held by us or shares for which we hold the
depositary receipts may be cancelled. A resoluon of the shareholders at the General Meeng to reduce the number of
shares must designate the shares to which the resoluon applies and must lay down rules for the implementaon of the
resoluon. A resoluon to reduce the issued share capital requires a majority of at least two-thirds of the votes cast, if
less than 50% of our issued and outstanding share capital is present or represented at the General Meeng.
5.3 Share Classes and Principal
As at March 1, 2022 the issued share capital of argenx SE amounts to €5,190,530.8 and is represented by 51,905,308
ordinary shares. There are only ordinary shares, and there are no special rights aached to any of the ordinary shares,
nor special shareholder rights, including vong rights, for any of our shareholders.
Any substanal holding and gross short posions in issuing instuons and shares with special controlling rights have to be
noed. An issuing instuon is a public limited company (naamloze vennootschap) incorporated under Dutch law whose
(depositary receipts for) shares are admied to trading on a regulated market in the Netherlands or in another member
state of the European Union or an EEA State, or a legal enty incorporated under the law of a state that is not an EU mem
-
ber state and whose (depositary receipts for) shares are admied to trading on a regulated market in the Netherlands.
As soon as the substanal holding or short posion equals or exceeds 3% of the issued capital, the holder should report
this. Subsequently, it should nofy the AFM again when his substanal holding or short posion consequently reaches,
exceeds or falls below a threshold. This can be caused by the acquision or disposal of shares by the shareholder or be
-
cause the issued capital of the issuing instuon is increased or decreased. Pursuant to chapter 5.3 of the DFSA, relevant
thresholds are: 3%, 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, 60%, 75% and 95%. Pursuant to a dra Dutch legislave
proposal published for consultaon on May 23, 2019 (the consultaon period of which ended on July 4, 2021), a thresh
-
old of 2% may be added to this list, however, it is not yet clear if and when this change will enter into eect.
The duty to nofy applies to legal enes as well as natural persons.
As of the date of this Universal Registraon Document, the following major shareholdings fall under the mandatory
noce provisions of chapter 5.3 of the DFSA on the basis of informaon provided by the shareholders and/or the public
register of all nocaons made available pursuant to the DFSA at the AFM’s website up to the date of this Universal
Registraon Document (see also secon 5.2 “General Descripon of Share Capital” on page 207 and further). No share
-
holdings above 3% were reported to the Company directly.
The total number of stock opons and restricted stock units outstanding as of March 1, 2022 amounts to 5,586,250.
At the date of this Universal Registraon Document, we are not directly or indirectly owned or controlled by any share
-
holder, whether individually or acng in concert. We are not aware of any arrangement that may, at a subsequent date,
result in a change of control of our company.
At the date of this Universal Registraon Document, as far as we are aware, there are no direct or indirect relaonships
between us and any of our signicant shareholders.
5.4 General meeting of Shareholders
The Arcles of Associaon provide that he annual general meeng must be held on the second Tuesday of the month
May. Other general meengs will be held whenever our Board of Directors deems such to be necessary. Shareholders
represenng alone or in aggregate at least one-tenth of our issued and outstanding share capital may, pursuant to the
Dutch Civil Code, request that a general meeng be convened. Within three months of it becoming apparent to our
Board of Directors that our equity has decreased to an amount equal to or lower than one-half of the paid-in and called-
up capital, a general meeng would be held to discuss any requisite measures.
We will give noce of each general meeng by publicaon on our website and furthermore, to the extent required, in
another manner in accordance with the applicable stock exchange regulaons. The noce convening any general meeng
must include, among other items, an agenda indicang the place and date of the meeng, the items for discussion and
vong, the proceedings for registraon including the registraon date, as well as any proposals for the agenda. Pursuant
to Dutch law, shareholders holding at least 3% of our issued and outstanding share capital have a right to request our
Board of Directors to include items on the agenda of the general meeng. Our Board of Directors must agree to these
requests, provided that (i) the request was made in wring and movated, and (ii) the request was received by the Chair
of our Board of Directors at least sixty days prior to the date of the general meeng.
Our Board of Directors must give noce of a general meeng, by at least such number of days prior to the day of the
meeng as required by Dutch law, which is currently forty-two days.
Each shareholder (as well as other persons with vong rights or meeng rights) may aend the general meeng, to
address the general meeng and, in so far as they have such right, to exercise vong rights pro rata to its shareholding,
PART V
216 | Share Classes and Principal Shareholders General meeting of Shareholders and Voting Rights | 217
Name of Benecial Owner
Number
of shares
Capital
interest
(percentage)
Number
of vong rights
Vong
rights
(percentage)
T. Rowe Price Group, Inc.
(1)
4,998,028
(2)
11.68 4,927,064
(3)
11.51
FMR LLC
(1)
5,025,092
(4)
9.80 5,025,092
(4)
9.80
Arsan Investments GP LLC
(1)
2,575,257
(5)
5.02 2,575,257
(5)
5.02
Federated Equity Management Company
of Pennsylvania
(1)
1,895,001
(6)
4.97 1,895,001
(6)
4.97
Johnson & Johnson Innovaon – JJDC, Inc.
(1)
1,766,899 4.66 1,766,899 4.66
The Vanguard Group
(1)
1,978,464 4.16 0 0
BlackRock, Inc.
(1)
2,397,921
(8)
4.64 2,774,397
(8)
5.37
Baillie Giord & Co.
(1)
0 0 2,966,216 6.24
Wellington Management Group LLP
(1)
0 0 2,276,361
(9)
4.81
(1) Based on the number of shares reported in, and at the me of, the most recent transparency nocaon led with the AFM.
(2) Consisng of 1,571 ordinary shares and 4,996,457 ADSs. There is a more recent SEC ling which sets out a number of 5,603,556 shares.
(3) Consisng of vong rights on 1,571 ordinary shares and 4,925,493 ADSs.
(4) There is a more recent SEC ling which sets out a number of 4,876,317 shares.
(5) Consisng of 105,864 ordinary shares and 2,469,393, according to the AFM ling, depository receipts and the respecve number of vong rights. There
is a more recent SEC ling which sets out a number of 3,180,665 shares.
(6) Consisng of 1,522,200 ordinary shares and 372,801 ADSs and the respecve number of vong rights.
(7) Consisng of 1,718,968 ordinary shares and 678,953, according to the AFM ling, depository receipts.
(8) Consisng of vong rights on 2,050,038 ordinary shares and 724,359, according to the AFM ling, depository receipts
(9) Consisng of vong rights on 1,545,652 ordinary shares, 729,479 ADSs and 1,230 equity swaps.
either in person or by proxy. Shareholders may exercise these rights, if they are the holders of shares on the regis
-
traon date which is currently the 28th day before the day of the meeng, and they or their proxy have noed our
Board of Directors of their intenon to aend the meeng in wring at the address and by the date specied in the
noce of the meeng.
Each shareholder may cast one vote for each ordinary share held.
Members of our Board of Directors may aend a general meeng in which they have an advisory role. The vong rights
aached to shares are suspended as long as such shares are held by us.
Resoluons of the general meeng are taken by an absolute majority, except where Dutch law or our Arcles of Associa
-
on provide for a qualied majority or unanimity.
One general meeng was held in 2021. The annual general meeng was held on May 11, 2021. In this meeng decisions
were taken on the adopon of the new remuneraon policy, the approval of the 2020 remuneraon report, the adopon
of the 2020 annual accounts, the allocaon of losses in the nancial year 2020, the release of the members of our Board
of Directors from liability for their respecve dues carried out in the nancial year 2020, the appointment of Yvonne
Greenstreet as non-execuve director to our Board of Directors, the reappointment of Anthony Rosenberg as non-exec
-
uve director to our Board of Directors, the authorizaon of our Board of Directors to issue shares and grant rights to
subscribe for shares in our share capital up to a maximum of 10% of the outstanding capital at the date of the general
meeng for a period of 18 months from the general meeng and to limit or exclude statutory pre-empve rights, and the
appointment of Deloie Accountants B.V. as external auditor of argenx for the 2021 nancial year.
5.5 Anti-Takeover Provisions
Various protecve measures are possible and permissible within the boundaries set by Dutch law and Dutch case law.
We have not implemented specic measures with the aim of deterring takeover aempts. However, we have adopted
several provisions that may have the eect of making a takeover of argenx more dicult or less aracve, including
requirements that certain maers, including an amendment of our Arcles of Associaon, may only be brought to our
shareholders for a vote upon a proposal by our Board of Directors. No takeover bid has been insgated by third pares in
respect of our equity during the previous nancial year and the current nancial year.
5.6 Amendments of Articles
of Association
The shareholders at the General Meeng may resolve to amend the Arcles of Associaon, at the proposal of our board of
directors, with the consent of the majority of the non-execuve directors. A resoluon by the shareholders at the General
Meeng to amend the Arcles of Associaon requires a simple majority of the votes cast in a meeng in which at least half
of our issued and outstanding capital is present or represented, or at least two-thirds of the votes cast, if less than half of
our issued and outstanding capital is present or represented at that meeng.
Changing the rights of any of the shareholders will require the Arcles of Associaon to be amended.
5.7 Obligations of Shareholders and
Members of the Managing Board
to Disclose Holdings
Shareholders may be subject to nocaon obligaons under the DFSA. Pursuant to chapter 5.3 of the DFSA, any per
-
son who, directly or indirectly, acquires or disposes of an actual or potenal capital interest and/or vong rights must
immediately give wrien noce to the AFM of such acquision or disposal by means of a standard form if, as a result of
such acquision or disposal, the percentage of capital interest and/or vong rights held by such person reaches, exceeds
or falls below the following thresholds: 3%, 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, 60%, 75% and 95%. Pursuant to a
dra Dutch legislave proposal published for consultaon on May 23, 2019 (the consultaon period of which ended on
July 4, 2021), a threshold of 2% may be added to this list, however, it is not yet clear if and when this change will enter
into eect. In addion, any person whose capital interest or vong rights reaches, exceeds or falls below a threshold
due to a change in our outstanding share capital, or in votes that can be cast on the shares as noed to the AFM by us,
should nofy the AFM no later than the fourth trading day aer the AFM has published our nocaon of the change in
its outstanding share capital.
Each person holding an interest in our share capital or vong rights of 3% or more at the me of admission of our shares
to trading must immediately nofy the AFM. Furthermore, every holder of 3% or more of our share capital or vong
rights whose interest at 31 December at midnight diers from a previous nocaon to the AFM must nofy the AFM
within four weeks.
For the purpose of calculang the percentage of capital interest or vong rights, the following interests must be taken
into account: (i) shares and/or vong rights directly held (or acquired or disposed of) by any person, (ii) shares and/or
vong rights held (or acquired or disposed of) by such person’s subsidiaries or by a third party for such person’s account
or by a third party with whom such person has concluded an oral or wrien vong agreement, (iii) vong rights acquired
pursuant to an agreement providing for a temporary transfer of vong rights in consideraon for a payment, and (iv)
shares and/or vong rights which such person, or any controlled enty or third party referred to above, may acquire
pursuant to any opon or other right to acquire shares and/or the aached vong rights.
Special rules apply to the aribuon of shares and/or vong rights that are part of the property of a partnership or other
form of joint ownership. A holder of a pledge or right of usufruct in respect of shares can also be subject to nocaon
obligaons, if such person has, or can acquire, the right to vote on the shares. The acquision of (condional) vong
rights by a pledgee or benecial owner may also
trigger nocaon obligaons as if the pledgee or benecial owner were the legal holder of the shares and/or vong
rights. We are required to nofy the AFM promptly of any change of 1% or more in our issued and outstanding share
capital or vong rights since the previous nocaon. The AFM must be noed of other changes in our issued and out
-
standing share capital or vong rights within eight days aer the end of the quarter in which the change occurred. The
AFM will publish all our nocaons of our issued and outstanding share capital and vong rights in a public register. If
a person’s capital interest and/or vong rights reach, exceed or fall below the above-menoned thresholds as a result of
a change in our issued and outstanding share capital or vong rights, such person is required to make a nocaon not
later than on the fourth trading day aer the AFM has published our nocaon as described above.
Furthermore, each member of our Board of Directors and certain other persons who, inter alia, have (co-)managerial
responsibilities, as well as certain persons closely associated with any such members or other persons, must immedi
-
ately give written notice to the AFM by means of a standard form of any change in his or her holding of our shares and
voting rights.
218 | Anti-Takeover Provisions Obligations of Shareholders and Members of the Managing Board to Disclose Holdings | 219
PART V
220 | Short Positions Transparency Directive | 221
PART V
5.8 Short Positions
Each person holding a net short posion amounng to 0.2% or more of the issued share capital of a Dutch listed compa
-
ny must report it to the AFM. Each subsequent increase of this posion by 0.1% above 0.2% will also have to be reported.
Each net short posion equal to 0.5% of the issued share capital of a Dutch-listed company and any subsequent increase
of that posion by 0.1% will be made public via the AFM short selling register. To calculate whether a natural person
or legal person has a net short posion, their short posions and long posions must be set o. A short transacon in
a share can only be contracted if a reasonable case can be made that the shares sold can actually be delivered, which
requires conrmaon of a third party that the shares have been located. There is also an obligaon to nofy the AFM of
gross short posions. The nocaon thresholds are the same as apply in respect of the nocaon of actual or potenal
capital interests in the capital and/or vong rights, as described above.
The AFM keeps a public register of all nocaons made pursuant to these disclosure obligaons and publishes any no
-
caon received. In 2021, no short posion was declared to the AFM.
5.9 Market Abuse Regime
The Market Abuse Regulaon (Regulaon EU nr. 596/2014,
MAR
) and related Commission Implemenng Regulaons and Delegated Regulaons, provide for specic rules that intend to prevent market abuse, such as the prohibions on insider
trading, divulging inside informaon and pping, and market manipulaon (the
European Union Market Abuse Rules
).
We are subject to the European Union Market Abuse Rules and non-compliance with these rules may lead to criminal
nes, administrave nes, imprisonment or other sancons.
The European Union Market Abuse Rules on market manipulaon may restrict our ability to buy back its shares. In certain cir
-
cumstances, our investors can also be subject to the European Union Market Abuse Rules. Pursuant to Arcle 19 MAR (“Manag
-
ers’ transacons”), members of our Board of Directors and any senior execuve who has regular access to inside informaon re
-
lang directly or indirectly to us and has the power to take managerial decisions aecng the future developments and business
prospects of us, (persons discharging managerial responsibilies,
PDMRs
), must nofy the AFM of every transacon conducted on their own account relang to our shares or debt instruments or to derivaves or other nancial instruments linked thereto.
In addion, certain persons closely associated with our PDMRs must also nofy the AFM of every transacon conducted on
their own account relang to our shares or debt instruments or to derivaves or other nancial instruments linked thereto.
MAR determines the following categories of persons: (i) the spouse or any partner considered by naonal law as equivalent
to the spouse, (ii) dependent children, (iii) other relaves who have shared the same household for at least one year at the
relevant transacon date and (iv) a legal person, trust or partnership, the managerial responsibilies of which are dis
-
charged by a person discharging managerial responsibilies or by a person referred to in point (i), (ii) or (iii), which is directly
or indirectly controlled by such a person, which is set up for the benet of such a person, or the economic interests of which
are substanally equivalent to those of such a person. These nocaons must be made no later than on the third business
day following the transacon date and by means of a standard form. The nocaon may be postponed unl the moment
that the value of the transacons performed for the PDMR that person’s own account, or transacons carried out by the
persons closely associated with that person, reaches or exceeds an amount of €5,000 in the calendar year in queson.
The AFM keeps a public register of all nocaons under arcle 19 MAR. Third pares can request to be noed auto
-
macally by e-mail of changes to the public register. Pursuant MAR, we will maintain a list of its insiders. In addion, to
further ensure compliance with MAR, we have adopted an internal policy relang to the possession of and transacons
by members of our PDMRs and employees in our shares or in nancial instruments of which the value is (co)determined
by the value of our shares. Our Insider Trading Policy has been published on our website on hps://www.argenx.com/
investors/governance/rules-codes-compliance.
5.10 Transparency Directive
We are a European public company with limited liability (
Societas Europaea
or
SE
) incorporated and existing under
the laws of the Netherlands. The Netherlands is our European Union home member state (
lidstaat van herkomst
) for
the purposes of Directive 2004/109/EC (as amended by Directive 2013/50/EU), or the Transparency Directive, as a
consequence of which we are subject to the DFSA in respect of certain ongoing transparency and disclosure obliga
-
tions. In addition, as long as our shares are listed on Euronext Brussels and the ADSs on Nasdaq, we are required to
disclose any regulated information which has been disclosed pursuant to the DFSA as well in accordance with the Bel
-
gian Act of May 2, 2007, the Belgian Royal Decree of November 14, 2007 and Nasdaq listing rules. We must publish
our annual accounts within four months after the end of each financial year and our half-yearly figures within two
months after the end of the first six months of each financial year. Within five calendar days after adoption of our
annual accounts, we must file our adopted annual accounts with the AFM. Pursuant to the DFSA, we will be required,
among other things, to make public without delay any change in the rights attaching to our shares or any rights to
subscribe our shares.
5.11 Dutch Financial Reporting
Supervision Act
The Dutch Financial Reporting Supervision Act (
Wet toezicht financiële verslaggeving
) (the
DFSA
) applies to finan-
cial years starting from 1 January 2006. On the basis of the DFSA, the AFM supervises the application of financial
reporting standards by, among others, companies whose corporate seat is in the Netherlands and whose securities
are listed on a Dutch Regulated Market or foreign stock exchange. Pursuant to the DFSA, the AFM has an inde
-
pendent right to (i) request an explanation from us regarding its application of the applicable financial reporting
standards and (ii) recommend to us the making available of further explanations. If we do not comply with such a
request or recommendation, the AFM may request that the Enterprise Chamber order us to (i) make available fur
-
ther explanations as recommended by the AFM, (ii) provide an explanation of the way we have applied the applica
-
ble financial reporting standards to its financial reports or (iii) prepare our financial reports in accordance with the
Enterprise Chamber’s instructions.
This Universal Registraon Document also concerns the annual nancial reporng within the meaning of 5:25c(2) DFSA.
5.12 Dividends and Other Distributions
We have not paid or declared any cash dividends on our ordinary shares, and we do not ancipate paying any cash
dividends in the foreseeable future. All of our outstanding shares have the same dividend rights. We intend to retain all
available funds and any future earnings to fund the development and expansion of our business.
Even if future operaons lead to signicant levels of distributable prots, we currently intend that any earnings will be
re¬invested in our business and that cash dividends will not be paid unl we have an established revenue stream to
support connuing cash dividends. In addion, payment of any future dividends to shareholders would be subject to
shareholder approval at our General Meeng, upon proposal of our Board of Directors, which proposal would be subject
to the approval of the majority of the non-execuve directors aer taking into account various factors including our busi
-
ness prospects, cash requirements, nancial performance and new product development.
222 | Financial Calendar 2022
Under Dutch law, a Dutch European public company with limited liability (Societas Europaea or SE) may only pay dividends
if the shareholders’ equity (eigen vermogen) exceeds the sum of the paid-up and called-up share capital plus the reserves
required to be maintained by Dutch law or our Arcles of Associaon. Subject to such restricons, any future determina
-
on to pay dividends would be at the discreon of the shareholders at our General Meeng.
Our Arcles of Associaon, as incorporated into this URD by reference (see secon 9 “Informaon incorporated by refer
-
ence”) contain the provision on the distribuon of prots in its arcle 20 (Prots, distribuons and losses).
5.13 Financial Calendar 2022
March 3, 2022 full year and fourth quarter 2021 nancial results
May 5, 2022 rst quarter 2022 nancial results
May 10, 2022 annual general meeng
July 28, 2022 half year and second quarter 2022 nancial results
October 27, 2022 third quarter 2022 nancial results
6
PART VI
Operating
and Financial
Review
Contents
6.1 Overview 226
6.2 Basis of Presentaon 227
6.3 Capitalizaon and Indebtedness 233
6.4 Crical Accounng Policies and Signicant Judgements 234
6.5 Results of Operaon 235
6.6 Liquidity and Capital Resources 241
6.7 O-Balance Sheet Arrangements 243
6.8 Contractual Obligaons 243
6.9 Financial Statements 244
6.10 Informaon Regarding the Independent Auditor 244
6.11 Material Contracts and Related Party Transacons 244
6.12 Employees 246
6.13 Legal and Arbitraon Proceedings 247
6.14 Insurance 247
6 Operating and
Financial review
6.1 Overview
Since our inception in 2008, we have focused most of our financial resources and efforts towards developing our
SIMPLE Antibody
™
Platform and antibody engineering technologies, identifying potential product candidates,
establishing process, development and manufacturing capabilities for our product candidates and advancing multiple
discovery programs into the clinic. We are advancing a deep pipeline of both clinical- and preclinical-stage product
candidates for the treatment of neuromuscular, hematology, dermatology and nephrology indications within our
growing commercial franchises. Leveraging our technology suite and clinical expertise, we have advanced several
candidates into late-stage clinical development and we currently have multiple programs in the discovery stage.
Through December 31, 2021, we have raised an aggregate gross proceeds of $3,514.4 million, including:
i. an aggregate of $65.3 million (€46.0 million) from the private placement of equity securies in 2008, 2009 and 2011;
ii. $56.9 million (€41.8 million) from our inial public oering on the Euronext Brussels in 2014;
iii. $50.9 million (€46.0 million) from the private placement of equity securies, primarily to U.S. based instuonal
investors, in 2016;
iv. $114.7 million from our inial U.S. public oering on the Nasdaq Global Select Market in May 2017;
v.
$265.5 million from our second U.S public oering on the Nasdaq Global Select Market in December 2017;
vi. $300.6 million from our third U.S public oering on the Nasdaq Global Select Market in September 2018;
vii. $200.9 million (€176.7 million) from the private placement of equity securies as part of the closing of the global
collaboraon and license agreement with Janssen in January 2019;
viii. $556.3 million (€502.2 million) from a global oering in November 2019;
ix. $590.5 million from our U.S. public oering on the Nasdaq Global Select Market and $222.8 million (€200.4 million)
from a concurrent private placement in May 2020; and
x. $1,090.1 million from from our U.S. public oering on the Nasdaq Global Select Market in January 2021.
In addion, as of December 31, 2021, we have received upfront payments, milestone payments and research and devel
-
opment service fees from our collaborators totaling $578.9 million. As of December 31, 2021, we had cash, cash equiva
-
lents and current nancial assets of $2,336.7 million.
Our balance sheet shows our total assets accumulate to $2,850.3 million for the year ended December 31, 2021, com
-
pared to $2,279.4 million for the year ended December 31, 2020 and $1,610.2 million for the year ended December 31,
2019. The main reason for the material change in balance sheet total are the various equity nancing rounds (described
in secon 5.2.3 “History of Share Capital”), completed over the period covered by the nancial statements incorporated
herein by reference (see secon 9 “Informaon incorporated by reference”).
Since our incepon, we have incurred signicant operang losses. On December 17, 2021, the FDA approved efgargi
-
mod, which is marketed as VYVGART™ (efgargimod alfa-fcab), for the treatment of gMG in adult paents who are AChR
anbody posive. On January 20, 2022, the Japan PMDA approved VYVGART™ (efgargimod alfa) for the treatment
of adult paents with gMG who do not have sucient response to steroids or non-steroidal ISTs. These are the only
approved products we currently have and we have not generated any revenue from product sales unl the end of the
nancial year ended December 31, 2021.
Our ability to generate revenue sufficient to achieve profitability will depend significantly upon the successful com
-
mercialization of our approved product and development and eventual commercialization of one or more of our prod
-
uct candidates. For the years ended December 31, 2021 and 2020, we incurred total comprehensive losses of $450.6
million and $446.2 million, respectively. As of December 31, 2021, we had accumulated losses of $1,400.2 million.
We expect our expenses to increase substanally in connecon with our further transion to an integrated immunology
company, including the further build-out of global commercial infrastructure and drug product inventory in light of the
global launch of VYVGART™ for the treatment of gMG, the advancement of our clinical-stage pipeline, including ongoing
registraonal trials across four indicaons of efgargimod, and connued investment in our IIP. In addion, we expect
to connue to incur signicant costs associated with operang as a public company in the U.S. We ancipate that our
expenses will increase substanally if and as we:
Research and Development acvies:
• execute the Phase 3 clinical trials of efgargimod in ITP, CIDP, PF and in PV;
• execute the Phase 2/3 clinical trials of efgargimod in BP and myosis and launch Phase 2/3 clinical trials in other indicaons;
• connue the research and development of our other clinical- and preclinical-stage product candidates and discovery
stage programs; and
• seek regulatory approvals for any product candidates that successfully complete clinical trials.
Pre-commercial and commercial acvies
• further build-out our sales, markeng and distribuon infrastructure and scale-up manufacturing capabilies to
commercialize VYVGART™ for which we obtained the regulatory approval from FDA and the PMDA and any product
candidate for which we may obtain approval; and
• expand our global reach enabling us to commercialize any product candidates for which we may obtain regulatory
approval.
Other acvies
• seek to enhance our technology plaorm and discover and develop addional product candidates;
• maintain, expand and protect our intellectual property porolio, including ligaon costs associated with defending
against alleged patent infringement claims;
• add clinical, scienc, operaonal, nancial and management informaon systems and personnel, including personnel
to support our product development and potenal future commercializaon eorts; and
• experience any delays or encounter any issues, including failed studies, ambiguous trial results, safety issues or other
regulatory challenges.
We expect that the costs of development and commercializaon might also signicantly increase due to current and
future collaboraons with research and development partners as well as commercial partners.
6.2 Basis of Presentation
6.2.1 Foreign currency transactions
Funconal and presentaon currency
Items included in the consolidated nancial statements of each of our enes are valued using the currency of their eco
-
nomic environment in which the enty operates. As of January 1, 2021, and for all periods thereaer, the consolidated
nancial statements are presented in USD ($), which is the Company’s presentaon currency.
Change in funconal and presentaon currency as of January 1, 2021
As of January 1, 2021, the Company changed its functional and presentation currency from EUR to USD. The change
in functional currency was made to reflect that USD has become the predominant currency for the Company,
representing a significant part of the Company’s cash flows and financing. The change has been implemented with
prospective effect.
226 | Overview
PART VI
Basis of Presentation | 227
The change in presentaon currency, eecve January 1, 2021, from EUR to USD is retroacvely applied to comparave
gures according to IAS 8 and IAS 21, as if USD had always been the presentaon currency of the consolidated nancial
statements. The change was made to beer reects the economic footprint of the Company’s business going forward.
The Company believes that the presentaon currency change will give investors and other stakeholders a clearer under
-
standing of the Company’s performance over me.
6.2.2 Revenue from Collaborations and license agreements
Revenues to date have consisted principally of milestones, license fees, non-refundable upfront fees and research and
development service fees in connection with collaboration and license agreements.
The Company recognizes revenue when the customer obtains control of promised goods or services, in an amount that
reects the consideraon that the Company expects to receive in exchange for those goods and services. In order to
determine revenue recognion for agreements that the Company determines to be in the scope of IFRS 15, the following
ve steps are performed:
1. Idenfy the contracts
In its current collaboraon and license agreements, the Company is mainly licensing its intellectual property and/or
providing research and development products and services, which might include a cost sharing mechanism and/or in the
future, selling its products to collaborave partner enes. Revenue is generated through these arrangements via up
-
front payments, milestone payments based on clinical and regulatory criteria, research and development service fees and
future sales-based milestones and sales-based royales. In some cases, the collaboraon and license agreements also
include an equity subscripon component. If this is the case, the Company analyses if the criteria to combine contracts,
as set out by IFRS 15, are met.
2. Idenfy performance obligaons
Depending on the type of the agreement, there can be one or more disnct performance obligaons under IFRS 15. This
is based on an assessment of whether the promises in an agreement are capable of being disnct and are disnct from
the other promises to transfer goods and/or services in the context of the contract.
For our material ongoing collaboraon and license agreement (i.e., the Zai Lab Agreement, as described in secon 1.4.2
“Our Strategic Partnership with Zai Lab for efgargimod”), the Company has assessed that there is more than one disnct
performance obligaon, being the transfer of a license and supply of clinical and commercial product.
This is because the Company considers the performance obligaons is disnct in the context of the contract as the li
-
cense has stand-alone value without the Company being further involved in the research and development collaboraon
and that there is no interdependence between the license and the clinical and commercial supply to be provided.
For other material collaboraon and license agreements, the Company has assessed that there is one single performance
obligaon in our collaboraon and license agreements, being the transfer of a license combined with performance of
research and development services.
3. Determine the transacon price
Our material ongoing collaboraon and license agreements include non-refundable upfront payments or license fees;
milestone payments, the receipt of which is dependent upon the achievement of certain clinical, regulatory or commer
-
cial milestones; royales on sales and research and development service fees.
• Non-refundable upfront payments or license fees
If the license to the Company’s intellectual property is determined to be disnct from the other performance obliga
-
ons idened in the arrangement, the Company recognizes revenue from non-refundable upfront fees allocated to this
license at the point in me the license is transferred to the customer and the customer has the right to use the license.
For all our material ongoing collaboraon and license agreements, the Company considers the performance obligaons
related to the transfer of the license as disnct from the other promises to transfer goods and/or services. The Company
ulizes judgement to assess the nature of the performance obligaon to determine whether the performance obligaon
is sased over me or at a point in me. If over me, revenue is then recognized based on a paern that best reects
the transfer of control of the service to the customer.
• Milestone payments other than sales based milestones
A milestone payment, being a variable consideraon, is only included in the transacon price to the extent it is highly
probable that a signicant reversal in the amount of cumulave revenue recognion will not occur when the uncertainty
associated with the variable consideraon is subsequently resolved. The Company esmates the amount to be included
in the transacon price upon achievement of the milestone event. The transacon price is then allocated to each perfor
-
mance obligaon on a stand-alone selling price basis, for which the Company recognizes revenue as or when the perfor
-
mance obligaons under the contract are sased. At the end of each reporng period, the Company re-evaluates the
probability of achievement of such milestones and any related constraint, and, if necessary, adjusts the esmate of the
overall transacon price. Any such adjustments are recorded on a cumulave catch-up basis, which would aect revenue
and earnings in the period of adjustment.
• Research and development service fees
Our material ongoing collaboraon and license agreements may include reimbursement or cost sharing for research and
development services. R&D services are performed and sased over me given that the customer simultaneously re
-
ceives and consumes the benets provided by us. Such costs reimbursements received are recognized in revenues when
costs are incurred and agreed by the pares.
• Sales based milestone payments and royales
Our material ongoing collaboraon and license agreements include sales based royales, including commercial milestone
payments based on the level of sales, and the license has been deemed to be de predominant item to which the royales
and commercial milestone payments relate. Related revenue is recognized as the subsequent underlying sales occur.
4. Allocate the transacon price
In principle, an enty shall allocate the transacon price to each performance obligaon idened in the contract on a
relave stand-alone selling price basis. As our ongoing collaboraon and license agreement (i.e., the Zai Lab Agreement,
as described in secon 1.4.2 “Our Strategic Partnership with Zai Lab for efgargimod”) contains more than one perfor
-
mance obligaon, the Company assesses to allocate the transacon price to all performance obligaon idened.
5. Recognize revenue
Revenue is recognized when the customer obtains control of the goods and/or services as provided in the collaboraon
and license agreements. The control can be transferred over me or at a point in me – which results in the recognion
of revenue over me or at a point in me.
As our ongoing collaboraon and license agreements (i.e., the Zai Lab Agreement, as described in secon 1.4.2 “Our Stra
-
tegic Partnership with Zai Lab for efgargimod”) contains more than one performance obligaon, the Company recog
-
nized revenue at point in me for transfer of license and the Company recognizes revenue over me for supply of clinical
and commercial products as customer simultaneously receive the benets provided by the Company’s performance,
sased over me.
Other ongoing collaboraon and license agreements only contain one single performance obligaon which is, as the
customer simultaneously receive the benets provided by the Company’s performance, sased over me, the Company
recognizes revenue over me.
The recognion of revenue over me is based on a paern that best reects the sasfacon of the related performance
obligaon, applying the input method. The input method esmates the sasfacon of the performance obligaon as the
percentage of total collaboraon costs that are completed each period compared to the total esmated collaboraon costs.
228 | Basis of Presentation Basis of Presentation | 229
PART VI
Research and development service fees are recognized as revenue when costs are incurred and agreed by the pares as
the Company is acng as a principal in the scope of its stake of the research and development acvies of its ongoing
collaboraon and license agreements.
6.2.3 Other Operating Income
As a company that carries extensive research and development acvies, we benet from various grants, research and
development incenves and payroll tax rebates from certain governmental agencies. These grants and research and
development incenves generally aim to partly reimburse approved expenditures incurred in our research and develop
-
ment eorts. The primary grants, research and development incenves and payroll tax rebates are as follows:
• Government Grants
We have received several grants from agencies of the Flemish government to support various research programs fo
-
cused on technological innovaon in Flanders. These grants require us to maintain a presence in the Flemish region for
a number of years and invest according to pre agreed budgets.
• Research and Development Incenves
Companies in Belgium can benet from tax savings on amounts spent on research and development by applying a
one me or periodic tax deducon on research and development expenditures for the acquision or development of
patents. This tax credit is a reducon of the corporate income taxes for Belgian statutory purposes and is transferrable
to the next four accounng periods. These tax credits are paid to us in cash aer ve years to the extent they have not
been oset against corporate taxes due.
• Payroll Tax Rebates
We also benet from certain rebates on payroll withholding taxes for scienc personnel. The government grants
and research and development incenves generally aim to partly reimburse approved expenditures incurred in our
research and development eorts and are credited to the income statement, under other operang income, when the
relevant expenditure has been incurred and there is reasonable assurance that the grant or research and development
incenve is receivable.
• Changes in fair value on non-current nancial assets
In March 2019, the Company entered into a license agreement with AgomAb for the use of HGF-mimec SIMPLE
Anbodies™, developed under the Company’s IIP. In exchange for granng this license, the Company received a prot
share in AgomAb.
In March 2021, AgomAb secured $74.0 million in Series B nancing by issuing 286,705 Preferred B Shares. argenx used
the post-money valuaon of Series B nancing round and the number of outstanding shares in determining the fair value
of the prot-sharing instrument, which results in a change in fair value of non-current nancial assets of $11.2 million
recorded through prot or loss. The fair value of non-current nancial assets is updated at the end of each reporng
period.
6.2.4 Research and Development Expenses
Research and development expenses consist principally of:
• personnel expense related to compensaon of research and development sta and related expenses, including sala
-
ries, benets and share-based compensaon expenses;
• external research and development expenses related to (i) chemistry, manufacturing and control costs for our product
candidates, both for preclinical and clinical tesng, all of which is conducted by specialized contract manufacturers, (ii)
fees and other costs paid to contract research organizaons in connecon with preclinical tesng and the performance
of clinical trials for our product candidates and (iii) costs associated with regulatory submissions and approvals, quality
assurance and pharmacovigilance;
• materials and consumables expenses;
• depreciaon and amorzaon of tangible and intangible xed assets used to develop our product candidates; and
• other expenses consisng of (i) costs associated with obtaining and maintaining patents and other intellectual property
and (ii) other costs such as travel expenses related to research and development acvies.
The following table shows our research and development expenses for the past three nancial years:
We incur various external expenses under our collaboraon and license agreements for material and services consumed
in the discovery and development of our partnered product candidates. Under our agreement with AbbVie, our own
research and development expenses were not reimbursed. Under our agreement with Janssen, we assumed certain
development obligaons, and were jointly responsible with Janssen for all research, development and regulatory costs
relang to the product. Under our agreement with Zai, we are responsible for certain costs relang to future clinical trials
involving efgargimod conducted parally by Zai.
Our research and development expenses may vary substanally from period to period based on the ming of our re
-
search and development acvies, including the ming of the iniaon of clinical trials, producon of product batches
and enrolment of paents in clinical trials. Research and development expenses are expected to increase as we advance
the clinical development of efgargimod and ARGX-117 and further advance the research and development of our other
early stage pipeline candidates. The successful development of our product candidates is highly uncertain. At this me,
we cannot reasonably esmate the nature, ming and esmated costs of the eorts that will be necessary to complete
the development of, or the period, if any, in which material net cash inows may commence from, any of our product
candidates. This is due to numerous risks and uncertaines associated with developing drugs, as fully described in
chapter 2 “Risk Factors”, and including the uncertainty of:
• the scope, rate of progress and expense of our research and development acvies;
• the successful enrollment in, and compleon of clinical trials;
• the ability to market, commercialize and achieve market acceptance for efgargimod (except for the U.S. and Japan),
or any other product candidate that we may develop in the future, if approved;
• establishing and maintaining a connued acceptable safety prole for our product candidates;
• the terms, ming and receipt of regulatory approvals from applicable regulatory authories;
• the successful compleon of preclinical studies necessary to support IND applicaons in the United States or similar
applicaons in other countries;
• the expense of ling, prosecung, defending and enforcing patent claims and other intellectual property rights;
and our current and future collaborators connuing their collaboraons with us.
PART VI
230 | Basis of Presentation Basis of Presentation | 231
Financial year ended December 31,
(In USD thousands) 2021 2020 2019
Research and development expenses 580,520 370,885 220,771
6.2.5 Selling, General and Administrative Expenses
Selling, general and administrave expenses consist primarily of (i) personnel expenses relang to salaries and related
costs for personnel, including share-based compensaon, of our employees in execuve, nance, business development,
markeng, commercial and support funcons, (ii) professional fees for business development, markeng, IT, audit,
commercial, legal services and investor relaons costs, (iii) board expenses consisng of directors’ fees, travel expenses
and share-based compensaon for non-execuve board members, (iv) costs associated with preparaon of commercial
launch of VYVGART™ for the treatment of gMG in the U.S. and promoonal acvies (v) costs associated with the prepa
-
raon of the commercial launch in Japan and EMEA and connued investment in supply chain, (vi) allocated facilies
costs and (vii) other selling, general and administrave expenses, including leasing costs, oce expenses, travel costs.
We expect our general and administrave expenses to increase as we connue to support our growth and operate as a
public company in the U.S. Such costs include increases in our nance and legal personnel, addional external legal and
audit fees, and expenses and costs associated with compliance with the regulaons governing public companies. We ex
-
pect our selling and markeng expenses to increase signicantly due to markeng and promoonal acvies with respect
to the commercial launch of VYVGART™ in the U.S. and Japan.
6.2.6 Financial Income (Expense)
Financial income mainly reects interest earned on our cash and cash equivalents and current nancial assets and net
gains on our cash and cash equivalents and current nancial assets held at fair value through prot or loss. Financial
expense corresponds mainly to net losses on cash and cash equivalents and current nancial assets held at fair value
through prot or loss and other nancial expenses.
6.2.7 Exchange Gains (Losses)
Our exchange gains (losses) relate to (i) our transacons denominated in foreign currencies, mainly in Euro, Swiss francs,
Brish pounds and Japanese yens which generate exchange gains or losses and (ii) the translaon at the reporng date of
assets and liabilies denominated in foreign currencies into USD, which is our funconal and presentaon currency since
January 1, 2021 and therefore the presentaon currency throughout this Universal Registraon Document. For more
informaon on currency exchange uctuaons on our business, please see 2.7.5 “Exchange rate uctuaons or abandon
-
ment of the euro currency may materially aect our results of operaons and nancial condion.”. We have no derivave
nancial instruments to hedge interest rate and foreign currency risk.
6.2.8 Income Tax Expense
We have a history of losses. We expect to connue incurring losses as we connue to invest in our clinical and pre-clin
-
ical development programs and our discovery plaorm, and as we incur costs for the commercial launch of VYVGART™,
following the recent regulatory approval by the FDA and the PMDA. Consequently, we do not have any deferred tax asset
regarding unused tax losses on our consolidated statements of nancial posion.
We are incurring current income tax expense on the prot generated in various subsidiaries in view of the transfer price
agreements set up between argenx BV and these subsidiaries.
6.3 Capitalization and Indebtedness
The table below sets forth our capitalizaon as of December 31, 2021 on an actual basis:
The table below sets forth our indebtedness as of December 31, 2021 on an actual basis:
PART VI
232 | Basis of Presentation Capitalization and Indebtedness | 233
(1) Legal reserves are the amount of translaon dierences.
(In USD thousands)
As at December 31, 2021
(audited)
Total current debt (including current poron of non-current debt)
0
Guaranteed 0
Secured 0
Unguaranteed / unsecured 0
Total non-current debt (excluding current poron of non-current debt)
0
Guaranteed 0
Secured 0
Unguaranteed / unsecured 0
Shareholder equity 2,534,224
Share capital 6,233
Share premium 3,462,775
Legal reserve(s)(1) 131,684
Retained earnings (1,400,197)
Other reserves 333,729
Total
2,534,224
(In USD thousands)
As at December 31, 2021
(audited)
A. Cash
242,494
B. Cash equivalents
(1)
1,092,182
C. Other current nancial assets
(2)
1,002,052
D. Liquidity
(A)+(B)+(C)
2,336,728 E. Current nancial debt
(including debt instruments, but excluding
current poron of non-current nancial debt)
0
F. Current poron of non-current nancial debt
(3)
3,509
G. Current nancial indebtedness
(E + F)
3,509H. Net current nancial indebtedness
(G - D)
(2,333,219) I. Non-current nancial debt (excluding current poron and debt instruments)
(3)
7,956
J. Debt instruments
0
K. Non-current trade and other payables
0
L. Non-current nancial indebtedness
(I)+(J)+(K)
7,956M. Total nancial indebtedness
(H)+(L)
(2,325,263)(1) See note 12 “Cash and cash equivalents” to our consolidated nancial statements in secon 7 “Consolidated Financial Statements – audited as of and
for the years ended December 31, 2021, 2020 and 2019”.
(2) See note 11 “Financial assets – current” to our consolidated nancial statements in secon 7 “Consolidated Financial Statements – audited as of and
for the years ended December 31, 2021, 2020 and 2019”.
(3) Please note that nancial debt balances as presented in the table above do not include any indirect or conngent indebtedness. For more informaon
on the Company’s indirect and conngent indebtedness, please see note 29 “Commitments” to our consolidated nancial statements in secon 7
“Consolidated Financial Statements – audited as of and for the years ended December 31, 2021, 2020 and 2019”.
As of December 31, 2021, current nancial debt (as disclosed in item E. in the table above) included current liabilies re
-
lated to short-term leases in the amount of $3.5 million and non-current nancial debt (as disclosed in item I. in the table
above) included non-current liabilies related to long-term leases in the amount of $8.0 million.
More informaon is included in our consolidated nancial statements and related notes included in secon 7 “Consoli
-
dated Financial Statements – audited as of and for the years ended December 31, 2021, 2020 and 2019”.
6.4 Critical Accounting Policies
and Significant Judgments
and Estimates
In the applicaon of the Company’s accounng policies, which are described above, the Company is required to make
judgments, esmates and assumpons about the carrying amounts of assets and liabilies that are not readily apparent
from other sources. The esmates and associated assumpons are based on historical experience and other factors that
are considered to be relevant. Actual results may dier from these esmates.
The esmates and underlying assumpons are reviewed on an ongoing basis. Revisions to accounng esmates are
recognized in the period in which the esmate is revised if the revision aects only that period or in the period of the
revision and future periods if the revision aects both current and future periods.
6.4.1 Critical estimates in applying accounting policies
The following areas are areas where key assumpons concerning the future, and other key sources of esmaon uncer
-
tainty at the end of the reporng period, have a signicant risk of causing a material adjustment to the carrying amounts
of assets and liabilies within the next nancial year.
Research and development cost accruals
The Company recognizes costs of $163.7 million, as specied in note 15 “Trade and other payables” to the consolidated
nancial statements, incurred for clinical trial acvies and manufacturing of drug products, as research and develop
-
ment expenses based on an evaluaon of its vendors’ progress toward compleon of specic tasks. Timing of payment
may dier signicantly from the period in which the costs are recognized as expense, resulng in clinical trial accruals
recognized within “Trade and other payables” in the consolidated statements of nancial posion.
Quancaon of the research progress and the translaon of the progress to these accruals requires esmates, because
the progress is not directly observable. In esmang the vendors’ progress toward compleon of specic tasks, the
Company therefore uses non-nancial data such as paent enrollment, clinical site acvaons and vendor informaon
of actual costs incurred. This data is obtained through reports from or discussions with Company personnel and outside
service providers as to the progress or state of compleon of trials, or the compleon of services. Costs are expensed
over the service period the services are provided. Costs for services provided that have not yet been paid are recognized
as accrued expenses.
6.5 Results of Operation
Below is the comparison of the consolidated statements of prot or loss for the nancial years ended December 31,
2021, 2020 and 2019.
6.5.1 Revenue
234 | Critical Accounting Policies and Significant Judgements and Estimates Results of Operation | 235
PART VI
Financial year ended December 31,
% change
(2021
compared
to 2020)(In USD thousands) 2021 2020 2019
Zai Lab 151,903 — — 100
Janssen 292,279 33,759 22,386 766
AbbVie 121 565 855 (79)
Agomab — — 1,684
Other — 38 50 (100)
Upfront payments
444,303 34,362 24,975 1,193
Zai Lab 25,634 — — 100
Janssen 22,865 2,641 1,738 766
AbbVie 102 762 30,077 (87)
Other 1,214 19 25 6,289
Milestone payments
49,815 3,422 31,840 1,356
Janssen 2,028 3,175 21,236 (36)
Other 298 284 411 5
Research and development service fees 2,326 3,459 21,647 (33)
Zai Lab 833 — — 100
Other revenues — 100
833
— Total revenue
497,277 41,243 78,462 1,106
Financial year ended December 31,
% change
(2021
compared
to 2020)(In USD thousands, unless otherwise indicated) 2021 2020 2019
Revenue 497,277 41,243 78,462 1,106
Other operang income 42,141 23,668 15,563 78
Total operang income 539,418 64,911 94,025 731
Research and development expenses (580,520) (370,885) (220,771) 57
Selling, general and administrave expenses (307,644) (171,643) (72,146) 79
Total operang expenses (888,164) (542,528) (292,917) 64
Operang loss (348,746) (477,617) (198,892) (27)
Financial income /(expenses) (944) (1,501) 15,983 (37)
Exchange gains (losses) (50,053) (126,234) 6,990 (60)
Loss before taxes
(399,743) (605,352) (175,919) (34)
Income tax expense (8,522) (3,103) (5,289) 175
Loss for the year
(408,265) (608,455) (181,208) (33)
Weighted average number of shares outstanding 51,075,827 45,410,442 38,619,121 12
Basic and diluted loss per share (in USD) (7.99) (13.40) (4.69) (40)
Kim
“ Some days I think my current treatments
control my disease, and just when I feel like
things are smooth sailing, my symptoms
come rushing back.’’
MG Patient | 237
MG
Patient
236 | MG Patient
238 | Results of Operation Results of Operation | 239
PART VI
Our revenue increased by $456.1 million to $497.3 million for the year ended December 31, 2021, compared to $41.2
million for the year ended December 31, 2020, a result of the recognion of the transacon price as a consequence of
the terminaon of the collaboraon agreement with Janssen and the closing of the strategic collaboraon for efgargi
-
mod with Zai Lab.
The increase in revenue recognion from upfront payments is primarily driven by the recognion of the upfront payment
received from Zai Lab upon strategic collaboraon for efgargimod and the recognion of the upfront payment received
under the collaboraon agreement with Janssen upon terminaon of the agreement.
The increase in revenue recognion from milestone payments is mainly due to the recognion of $25.0 million from Zai
Lab upon regulatory approval of efgargimod by FDA in the U.S. and the recognion of $22.9 million as a result of the
terminaon of the collaboraon agreement with Janssen.
The decrease in revenue recognion from research and development service fees of $1.1 million is primarily driven by
the decrease due to the terminaon of the collaboraon agreement with Janssen.
6.5.2 Other Operating Income
Other operang income increased by $18.4 million to $42.1 million for the year ended December 31, 2021, compared
to $23.7 million for the year ended December 31, 2020. The increase is primarily driven by
• the increase in research and development incenves, as a result of the increased research and development costs
incurred;
• the increase in payroll tax rebates, as a direct result of the increase in the employment of highly qualied research
and development personnel, eligible for specic payroll tax rebates; and
• the increase in fair value on our prot share in AgomAb Therapeucs NV.
For more informaon regarding governmental policies that could aect our operaons, see 1.9 “Regulaon”.
6.5.3 Research and Development Expenses
Our research and development expenses totaled $580.5 million and $370.9 million for the years ended December 31,
2021 and 2020, respecvely. The increase of $209.6 million compared to 2020 primarily results from an increase in
external research and development expenses and personnel expenses, primarily related to the efgargimod program in
various indicaons and other clinical and preclinical programs. Furthermore, the personnel expenses increased due to a
planned increase in headcount.
The increase of $74.4 million in personnel expense for the year ended December 31, 2021 corresponded primarily to (i)
an increase of $49.2 million for share-based compensaon expenses related to the grant of stock opons to our research
and development employees, and (ii) increased costs associated with addional research and development personnel.
We employed on average 349.7 full me equivalents in our research and development funcons in the year ended De
-
cember 31, 2021, compared to 213.0 in the year ended December 31, 2020.
Our external research and development expenses for the year ended December 31, 2021 totaled $382.9 million, com
-
pared to $259.9 million for the year ended December 31, 2020. The increase reects higher clinical trial costs and man
-
ufacturing expenses related to the development of our product candidate porolio. The table below provides addional
detail on our external research and development expenses by program:
External research and development expenses for our lead product candidate efgargimod totaled $311.0 million for the
year ended December 31, 2021, compared to $182.5 million for the year ended December 31, 2020. This increase of
$128.5 million corresponds primarily to increased manufacturing and clinical development acvies in relaon to:
• the execuon of two Phase 3 clinical trials in MG;
• the execuon of the bridging study for ENHANZE® efgargimod in MG;
• the execuon of two Phase 2 clinical trials and iniaon of the Phase 3 clinical trial in CIDP;
• the execuon of two Phase 3 clinical trials in ITP;
• the execuon of the Phase 2 clinical trial and iniaon of the Phase 3 clinical trial in PV and PF;
• the execuon of Phase 2 clinical trial in BP; and
• the execuon of Phase 1 clinical trial in Myosis.
External research and development expenses for cusatuzumab totaled $24.6 million for the year ended on December 31,
2021 compared to $48.8 million for the year ended December 31, 2020. This decrease of $24.2 million is the result of the
terminaon of the collaboraon agreement with Janssen.
External research and development expenses on other programs increased by $18.6 million to $47.2 million for the year
ended December 31, 2021, compared to $28.6 million for the year ended December 31, 2020. The increase is primarily
due to increased research and development expenses in relaon to the advancement of our ARGX-117 program, a com
-
plement-targeng anbody against C2.
Financial year ended December 31,
% change
(2021
compared
to 2020)(In USD thousands) 2021 2020 2019
Grants 4,398 1,365 2,563 222
Research and development incenves 13,970 10,257 5,373 36
Payroll tax rebates 12,621 9,095 6,413 39
Change in fair value on non-current nancial assets 11,152 2,951 1,214 278
Total
42,141 23,668 15,563
78Financial year ended December 31,
% change
(2021
compared
to 2020)(In USD thousands) 2021 2020 2019
efgargimod 311,038 182,511 94,024 70
cusatuzumab 24,630 48,796 43,139 (50)
Other programs 47,234 28,636 15,726 65
Total
382,902 259,943 152,889 47
Financial year ended December 31,
% change
(2021
compared
to 2020)(In USD thousands) 2021 2020 2019
Personnel expenses 160,464 86,036 51,172 87
External research and development expenses 382,902 259,943 152,889 47
Materials and consumables 2,735 3,562 2,267 (23)
Depreciaon and amorzaon 3,742 2,835 1,840 32
Other expenses 30,677 18,509 12,603 66
Total
580,520 370,885 220,771
57
PART VII
240 | Patient Story
Liquidity and Capital Resources | 241
PART VI
6.5.4 Selling, General and Administrative Expenses
Our selling, general and administrave expenses totaled $307.6 million and $171.6 million for the years ended Decem
-
ber 31, 2021 and 2020, respecvely. The increase in our selling, general and administrave expenses for the year ended
December 31, 2021 was principally due to an increase of personnel expense and professional fees, resulng from:
• increased costs of the share-based payment compensaon plans related to the grant of stock opons to our selling,
general and administrave employees;
• increased costs associated with addional employees recruited to strengthen our selling, general and administrave
acvies, in preparaon of the commercial launch of VYVGART™ in the U.S.;
• increased professional fees, primarily in preparaon of the commercial launch of VYVGART™ in the U.S.; and
• Promoonal and markeng cost associated with the commercial launch of VYVGART™, following the approval by FDA
in the U.S.
We employed on average 264.4 full me equivalents in our selling, general and administrave funcons in the year end
-
ed December 31, 2021, compared to 119.5 in the year ended December 31, 2020.
6.5.5 Financial Income (Expense)
For the year ended December 31, 2021, nancial expense amounted to $0.9 million compared to $1.5 million for the year
ended December 31, 2020. The decrease of $0.6 million in 2021 related primarily to higher nancial expenses incurred
in 2020 as a result of a decrease in net asset value on current nancial assets following the impact of the COVID-19
outbreak on the nancial markets, partly oset by the interest received on our cash and cash equivalents and current
nancial assets.
6.5.6 Exchange Gains (Losses)
Exchange losses totaled $50.1 million for the year ended December 31, 2021, compared to exchange losses of $126.2
million for the year ended December 31, 2020. The decrease was mainly aributable to unrealized exchange rate losses on
the cash, cash equivalents and current nancial assets posion in Euro during the nancial year ended December 31, 2021
as compared to unrealized exchange rate losses on the cash, cash equivalents and current nancial assets posion in USD
during the nancial year ended December 31, 2020.
6.6 Liquidity and Capital Resources
6.6.1 Sources of Funds
Since our incepon in 2008, we have invested most of our resources in developing our product candidates, building our
intellectual property porolio, developing our supply chain, conducng business planning, raising capital and providing
general and administrave support for these operaons. We currently have only one approved product but have not
generated any signicant revenue from product sales. To date, we have funded our operaons through public and private
placements of equity securies, upfront, milestone and expense reimbursement payments received from our collabo
-
rators, funding from governmental bodies and interest income from the investment of our cash, cash equivalents and
nancial assets. Through December 31, 2021, we have raised gross proceeds of $3,514.4 million from private and public
oerings of equity securies and received $578.9 million in revenue from our collaborators.
Our cash ows may uctuate and are dicult to forecast and will depend on many factors. On December 31, 2021, we
had cash, cash equivalents and current nancial assets of $2,336.7 million, compared to $1,996.5 million on December
31, 2020.
We have no ongoing material nancing commitments, such as lines of credit or guarantees, that are expected to aect
our liquidity over the next ve years, other than leases and our commitments to Lonza which are detailed in note 29
“Commitments” to our consolidated nancial statements in secon 7 “Consolidated Financial Statements – audited as of
and for the years ended December 31, 2021, 2020 and 2019”.
For more informaon as to the risks associated with our future funding needs, see the secon of this annual report tled
2.1 “Risk Factors Related to argenx’s Financial Posion and Need for Addional Capital”.
For more informaon as to our nancial instruments, please see note 26 “Financial management” to our consolidated
nancial statements in secon 7 “Consolidated Financial Statements – audited as of and for the years ended December
31, 2021, 2020 and 2019”.
6.6.2 Cash Flows
The table below summarizes our cash ows for the years ended December 31, 2021, 2020 and 2019.
Net Cash Used in Operang Acvies
Net cash oulow from our operang acvies increased by $208.3 million to a net oulow of $606.8 million for the year
ended December 31, 2021, compared to a net oulow of $398.5 million for the year ended December 31, 2020. The net
cash oulow from operang acvies for the year ended December 31, 2021 resulted primarily from (i) the research
and development expenses incurred in relaon to the manufacturing and clinical development acvies of efgargimod
Financial year ended December 31,
Variance 2021
compared
to 2020(In USD thousands) 2021 2020 2019
Cash and cash equivalents at beginning of the period 1,216,803 372,162 321,791 844,641
Net cash ows (used in)/ from operang acvies (606,812) (398,463) 151,630 (208,349)
Net cash ows (used in)/ from invesng acvies (347,070) 344,692 (833,267) (691,762)
Net cash ows (used in)/ from nancing acvies 1,121,342 833,003 733,726 288,339
Eect of exchange rate dierences on cash and cash equivalents (49,587) 65,409 (1,717)
(114,996)
Cash and cash equivalents at end of the period 1,334,676 1,216,803 372,162 117,873
Financial year ended December 31,
% change
(2021
compared
to 2020)
(In USD thousands)
2021 2020 2019
Personnel expenses 164,646 108,507 44,774 52
Professional fees 102,674 48,681 18,181 111
Supervisory board 12,958 4,838 3,127 168
Other expenses 27,366 9,617 6,064 185
Total
307,644 171,643 72,146
79240 | Results of Operation
242 | Patient Story
242 | Liquidity and Capital Resources
PART VII
O-Balance Sheet Arrangements | 243
PART VI
and the advancement of other clinical, preclinical and discovery-stage product candidate, (ii) the personnel expenses
and consulng expenses incurred in preparaon of the commercial launch of efgargimod in the U.S. and Japan, and
(iii) the manufacturing of inventory ahead of the commercial launch of efgargimod in the U.S. The net cash oulow
of $398.5 million for the year ended December 31, 2020 was primarily inuenced by (i) the research and development
expenses incurred in relaon to the manufacturing and clinical development acvies of efgargimod, cusatuzumab and
the advancement of other preclinical and discovery-stage product candidate, (ii) the personnel expenses and consulng
expenses incurred in preparaon of the potenal commercial launch of efgargimod in the U.S., and (iii) the manufactur
-
ing of pre-launch inventory ahead of the potenal commercial launch of efgargimod in the U.S.
Net Cash Used in / from Invesng Acvies
Invesng acvies for the year ended December 31, 2021, consist primarily of the divestment of current nancial assets
and the purchase of intangible assets. Cash ow from invesng acvies represented a net oulow of $347.1 million for
the year ended December 31, 2021, compared to a net inow of $344.7 million for the year ended December 31, 2020.
The net oulow for the year ended December 31, 2021 related primarily to (i) the net investment of $228.2 million in
current nancial assets, including money market funds and term deposit accounts, compared to a net divestment of
$341.9 million for the year ended December 31, 2020 and (ii) the cash oulow of $98.0 million during 2021 in relaon to
the purchase of a PRV from Bayer Healthcare Pharmaceucals.
Net Cash Provided by Financing Acvies
Financing acvies primarily consist of net proceeds from our private placements and public oerings of our securies
and exercise of stock opons. The net cash inow from nancing acvies was $1,121.3 million for the year ended De
-
cember 31, 2021, compared to a net cash inow of $833.0 million for the year ended December 31, 2020. The net cash
inow for the year ended December 31, 2021 was aributed to (i) $1,091.7 million net cash proceeds from our global
oering in February 2021, compared to $812.6 million net cash proceeds from our global oering and concurrent private
placement in May 2020 and (ii) $33.4 million proceeds received from the exercise of stock opons in 2021, compared to
$22.9 million for the year ended 2020.
Operang and Capital Expenditure Requirements
We have never achieved protability and, as of December 31, 2021, we had accumulated losses of $1,400.2 million.
We expect to connue to incur signicant operang losses for the foreseeable future as we connue our research and
development eorts, incur higher costs for commercializaon of efgargimod in the U.S. and Japan, and seek to obtain
regulatory approval and commercializaon of our product candidates in Europe.
On the basis of current assumpons, we expect that our exisng cash and cash equivalents and current nancial assets
will enable us to fund our operang expenses and capital expenditure requirements through at least the next twelve
months. Because of the numerous risks and uncertaines associated with the development and commercializaon of
efgargimod and our other product candidates and discovery stage programs and because the extent to which we may
enter into collaboraons with third pares for the development of these product candidates is unknown, we are unable
to esmate the amounts of increased capital outlays and operang expenses associated with compleng the research
and development of our product candidates. Our future capital requirements for efgargimod and our other product
candidates and discovery stage programs will depend on many factors, including:
• the progress, ming and compleon of preclinical tesng and clinical trials for our current or any future product candidates;
• the number of potenal new product candidates we idenfy and decide to develop;
• the me and costs involved in obtaining regulatory approval for our product candidates and any delays we may encoun
-
ter as a result of evolving regulatory requirements or adverse results with respect to any of our product candidates;
• selling and markeng acvies undertaken in connecon with the commercializaon of VYVGART™ or potenal com
-
mercializaon of any of our current or any future product candidates, if approved, and costs involved in the creaon of
an eecve sales and markeng organizaon;
• manufacturing acvies undertaken ahead of the commercializaon of VYVGART™ or potenal commercializaon
of any of our current or any future product candidates, if approved, and costs involved in the creaon of an eecve
supply chain;
• the costs involved in growing our organizaon to the size needed to allow for the research, development and potenal
commercializaon of our current or any future product candidates;
• the costs involved in ling patent applicaons and maintaining and enforcing patents or defending against claims or
infringements raised by third pares;
• the maintenance of our exisng collaboraon agreements and entry into new collaboraon agreements;
• the amount of revenues, if any, we may derive either directly or in the form of royalty payments from future sales of
our product candidates, if approved;
• developments related to COVID-19 and its impact on the costs and ming associated with the conduct of our clinical
trials, preclinical programs, manufacturing acvies and other related acvies; and
• developments related to the global economic uncertaines and polical instability resulng from the conict between
Russia and the Ukraine.
For more informaon as to the risks associated with our future funding needs, see the secon of this annual report tled
2.1 “Risk Factors Related to argenx’s Financial Posion and Need for Addional Capital”.
6.6.3 Working Capital Statement
In accordance with item 3.1 of Annex 11 of the commission delegated regulaon (EU) 2019/980 we make the following
statement:
In our opinion, the working capital of the Company is sucient for the Company’s present requirements, at least for a
period of twelve months from the date of this Universal Registraon Document.
6.7 O-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any o balance sheet arrangements, as de
-
ned in the applicable rules and regulaons, such as relaonships with unconsolidated enes or nancial partnerships,
which are oen referred to as structured nance or special purpose enes, established for the purpose of facilitang
nancing transacons that are not required to be reected on our balance sheets.
6.8 Contractual Obligations
Below an overview is given of our material contractual obligaons at December 31, 2021:
We signed lease agreements for laboratory and oce space in Zwijnaarde, Belgium, oces in Breda, Netherlands, Boston,
U.S., and Tokyo, Japan, as disclosed in note 6 “Property, Plant and Equipment” in the consolidated nancial statements in
secon 7 “Consolidated Financial Statements – audited as of and for the years ended December 31, 2021, 2020 and 2019”.
In January 2021, we have entered into a binding lease agreement related to the envisioned relocaon of our Zwijnaarde
Payments due by period
(In USD thousands) Total
Less than
1 year
1 to 3
years
3 to 5
years
More than
5 years
Lease liabilies 12,004 3,509 6,331 2,164 —
Lease commitments not commenced 19,155 — — 1,437 17,718
244 | Patient Story
244 | Financial Statements
PART VII
Material Contracts and Related Party Transactions | 245
PART VI
facility to a newly built oce in Zwijnaarde, with an annual base rent of $1.9 million, which would be operaonal in the
second quarter of 2025, and with an inial term of 10.5 years. Included in the binding lease commitment is a rent free
period of 6 months following the compleon of the building. The total future cash oulows related to this lease are rep
-
resented above as “Lease commitments not commenced”.
In addion, our lease liabilies include a lease plan for company cars with maturity dates up to four years.
For a discussion of contractual obligaons, please see note 29 “Commitments” in our consolidated nancial statements in
secon 7 “Consolidated Financial Statements – audited as of and for the years ended December 31, 2021, 2020 and 2019”.
6.9 Financial Statements
The (consolidated) audited nancial statements of the Company for the nancial years ending on December 31, 2020
and 2019 are incorporated into this Universal Registraon Document by reference. Please see secon 9 “Informaon
incorporated by reference”.
6.10 Information Regarding the
Independent Auditor
The audited consolidated nancial statements as of and for the nancial years ended December 31, 2021 and 2020 and
2019 have been audited by our independent auditor, Deloie Accountants B.V. (Deloie), who rendered an unqualied
audit report on these nancial statements. The partner of Deloie who signed the auditors’ reports is a member of the
Netherlands Instute of Chartered Accountants (
Koninklijke Nederlandse Beroepsorganisae van Accountants
). The oce
of Deloie is located at Wilhelminakade 1, 3072 AP Roerdam, the Netherlands.
6.11 Material Contracts and
Related Party Transactions
6.11.1 Material Contracts
Our material contracts are described in chapter 1.4 “Collaboraon Agreements”, 1.5 “License Agreements” and 1.6
“Distribuon Agreements”.
6.11.2 Related Party Transactions
Since December 31, 2021, being the end of the last nancial period for which audited nancial statements have been
published, we have not entered into any transacons with any related pares which are – as a single transacon or in
their enrety – material to us.
In addion, in the period covered by the nancial statements incorporated herein by reference, there has not been, nor
is there currently proposed, any material transacon or series of similar material transacons to which we were or are
a party in which any of the members of our Board of Directors or senior management, holders of more than 10% of any
class of our vong securies, or any member of the immediate family of any of the foregoing persons, had or will have a
direct or indirect material interest, other than the compensaon and shareholding arrangements we describe in para
-
graph 5.3 “Share Classes and Principal Shareholders”, and the transacons we describe below.
From me to me, in the ordinary course of our business, we may contract for services from companies in which certain
of the members of our senior management or directors may serve as director or advisor. The costs of these services is
negoated on an at arm’s length basis and none of these arrangements are material to us.
Agreements with Our Senior Management
We have entered into a management agreement with Tim Van Hauwermeiren as our Chief Execuve Ocer. The Chief
Execuve Ocer is our sole execuve director. The key terms of his agreement are as follows:
We may terminate Mr. Van Hauwermeiren’s services upon 18 months’ notice, or payment of 18 months’ pro-rated
base compensation in lieu of notice. Mr. Van Hauwermeiren would be entitled to the same payment in lieu of notice
in the event he terminates his services with us in circumstances in which it cannot reasonably be expected for him
to continue providing services to us (and after our failure to remedy such conditions after being provided at least 14
days’ notice). Mr. Van Hauwermeiren would also be entitled to payment in lieu of notice in the event he terminated
his services with us in certain cases of our failure to comply with obligations under applicable law or his agreement
(and after our failure to remedy such non-compliance, if non-deliberate, after being provided at least 14 days’ notice).
In these cases, there will be a full acceleration of the vesting of any outstanding stock options held by Mr. Van Hauwer
-
meiren. There will be no notice period or payment in lieu of notice in certain cases of Mr. Van Hauwermeiren’s failure
to comply with obligations under applicable law or his agreement. Mr. Van Hauwermeiren may be dismissed immedi
-
ately as an executive director.
Karl Gubitz, our Chief Financial Ocer, has an employment contract with our subsidiary, argenx US Inc., for an indenite
term. His employment contract may be terminated at any me by us, subject to a noce period and a severance payment of
at least twelve months.
Keith Woods, our Chief Operang Ocer, has an employment contract with our subsidiary, argenx US Inc., for an indenite
term. His employment contract may be terminated at any me by us, subject to a noce period and a severance payment of
at least twelve months.
Wim Parys, our Chief Medical Ocer, has an employment contract with our subsidiary argenx BV, for an indenite term. His
employment contract may be terminated at any me by us, subject to a noce period and a severance payment of at least
twelve months.
Hans de Haard, our Chief Scienc Ocer, has an employment contract with our subsidiary, argenx BV, for an indenite
term. His employment contract may be terminated at any me by us, subject to a noce period and a severance payment of
at least twelve months.
Tim Van Hauermeiren
Fixed base compensaon $651,986
Short-term variable compensaon
A target of 60% of the xed base compensaon based on previously
determined bonus targets established by the non-execuve directors
Pension contribuons
(1)
$26,894
Duraon Indenite
(1) Amounts shown represent pension contribuons paid during the year-ended December 31, 2021.
246 | Patient Story
246 | Employees
PART VII
Legal and Arbitration Proceedings | 247
PART VI
Arjen Lemmen, our VP Corporate Development & Strategy, has an employment contract with our subsidiary, argenx BV, for
an indenite term. His employment contract may be terminated at any me by us, subject to a noce period and a sever
-
ance payment of at least twelve months.
Dirk Beeusaert, our General Counsel unl December 31, 2021, had an employment contract with our subsidiary, argenx BV,
for an indenite term. This agreement was terminated with mutual agreement with eect from December 31, 2021.
Andria Wilk, our Global Head of Quality, has an employment contract with our subsidiary, argenx BV, for an indenite term.
Her employment contract may be terminated at any me by us, subject to a noce period and a severance payment of at
least twelve months.
Malini Moorthy, our General Counsel, joined argenx in 2022 and has an employment contract with our subsidiary, argenx US
Inc., for an indenite term. Her employment contract may be terminated at any me by us, subject to a noce period and a
severance payment of at least twelve months.
Luc Truyen, our Head of Research and Development Management Operaons and, from April 1, 2022 on, our Chief Medical
Ocer, has an employment contract with our subsidiary, argenx BV, for an indenite term. His employment contract may be
terminated at any me by us, subject to a noce period and a severance payment of at least twelve months.
Indemnicaon Agreements
In connecon with our inial U.S. public oering, we entered into indemnicaon agreements with each of our non-ex
-
ecuve directors and each member of our senior management. We have entered into such agreements with each new
non-execuve director or member of our senior management when they have joined us since our inial U.S. public oering.
Insofar as indemnicaon for liabilies arising under the Securies Act may be permied to non-execuve directors, ocers
or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such
indemnicaon is against public policy as expressed in the Securies Act and is therefore unenforceable.
6.12 Employees
As of December 31, 2021, we had 650 employees (excluding consultants) At each date shown below, we had the
following number of employees, broken out by department and geography.
Collecve bargaining agreements (
CBAs
) can be entered into in Belgium at the naonal, industry, or company levels. These CBAs are binding on both employers and employees. We have no trade union representaon or CBAs at the
company level, but we are subject to the naonal and industry level CBAs that relate to the chemical industry. The CBAs
currently applicable to us relate to employment condions such as wages, working me, job security, innovaon and
supplementary pensions. We have not had, and do not ancipate having, disputes on any of these subjects. CBAs may,
however, change the employment condions of our employees in the future and hence adversely aect our employment
relaonships.
6.13 Legal and Arbitration Proceedings
From me to me we may become involved in legal, governmental or arbitraon proceedings or be subject to claims
arising in the ordinary course of our business. Regardless of the outcome, ligaon can have an adverse impact on us be
-
cause of defense and selement costs, diversion of management resources and other factors. During the previous twelve
months, there have not been any legal, governmental or arbitraon proceedings (including any such proceedings which
are pending or threatened of which we are aware) which may have, or have had in the recent past signicant eects on
argenx and/or the Group’s nancial posion or protability.
6.14 Insurance
We maintain an insurance porolio that is common and appropriate for our business. Our main insurances are com
-
mercial general liability insurances, including products liability insurance, director and ocer liability insurance and our
marime insurance covering the risk of loss of product during transit and storage.
As at December 31, As at March 1
(In USD thousands)
2021 2020 2019 2022
Funcon
Research and development 289 193 118 307
Selling, general and administrave 361 143 70 377
Geography
Zwijnaarde, Belgium 296 213 145 308
Boston, U.S. 276 108 40 284
Tokyo, Japan 57 13 3 63
Breda, the Netherlands – – – –
Geneva, Switzerland 9 2 – 10
Issy Les Moulineaux, France 3 – – 6
Munich, Germany 9 – – 13
Toronto, Canada – – – –
Total
650 336
188684
7
PART VII
Consolidated
Financial
Statements
CONSOLIDATED FINANCIAL STATEMENTS – AUDITED AS OF AND FOR
THE YEARS ENDED DECEMBER 31, 2021, 2020 AND 2019
Contents
7.1 Consolidated Statements of Financial Posion 248
7.2 Consolidated Statements of Prot or Loss 250
7.3 Consolidated Statements of Comprehensive Income and Loss 251
7.4 Consolidated Statements of Cash Flows 252
7.5 Consolidated Statements of Changes in Equity 253
7.6 Notes to the Consolidated Financial Statements 254
PART VII
250 | Consolidated Statements of Financial Position
Consolidated Statements of Financial Position | 251
Consolidated Statements of
Financial Position
Assets
(In USD thousands $) Note
As of December
31, 2021
As of December
31, 2020
(*)
As of December
31, 2019
(*)
Current assets
Cash and cash equivalents 12 1,334,676 1,216,803 372,162
Research and development incenve receivables — current — 463 293
Financial assets — current 11 1,002,052 779,649 1,128,499
Prepaid expenses 58,946 27,913 10,136
Trade and other receivables 10 38,221 6,978 31,585
Inventories 9 109,076 25,195 —
Total current assets 2,542,971 2,057,001 1,542,675
Non-current assets
Other non-current assets 7 54,876 7,816 3,624
Research and development incenve receivables — non-current 32,707 20,626 9,624
Deferred tax asset 8 32,191 15,038 —
Property, plant and equipment 6 15,844 11,582 9,175
Intangible assets 5 171,684 167,344 45,117
Total non-current assets 307,303 222,406 67,540
Total assets 2,850,274 2,279,407 1,610,215
*
The Company has adopted a change in its presentaon currency from EUR to USD at January 1, 2021, as described in note 3.4.4. Accordingly, the
December 31, 2020 and December 31, 2019 comparave statements of nancial posion and related notes have been re-presented retrospecvely based
on the accounng policies as outlined in note 3.4.4.
The accompanying notes form an integral part of these consolidated nancial statements.
Consolidated Statements of
Financial Position
Equity and Liabilies
(In thousands of $) Note
As of December
31, 2021
As of December
31, 2020
(*)
As of December
31, 2019
(*)
Equity
13
Equity aributable to owners of the parent
Share capital 6,233 5,744 5,209
Share premium 3,462,775 2,339,033 1,505,641
Translaon dierences 131,684 134,732 (27,541 )
Accumulated losses
(1,400,197 ) (991,932 ) (383,477 )
Other reserves 333,729 186,474 80,577
Total equity 2,534,224 1,674,051 1,180,409
Non-current liabilies
Provisions for employee benets 417 156 72
Lease liabilies — non-current 22 7,956 6,181 5,101
Deferred tax liabilies 8 6,438 1,487 —
Deferred revenue — non-current 16 — 269,039 244,937
Total non-current liabilies 14,811 276,863 250,110
Current liabilies
Lease liabilies — current 22 3,509 3,476 2,218
Trade and other payables 15 293,415 275,192 95,827
Tax liabilies 4,315 3,497 386
Deferred revenue — current 16 — 46,328 81,265
Total current liabilies 301,239 328,493 179,696
Total liabilies 316,050 605,356 429,806
Total Equity and Liabilies 2,850,274 2,279,407 1,610,215
*
The Company has adopted a change in its presentaon currency from EUR to USD at January 1, 2021, as described in note 3.4.4. Accordingly, the
December 31, 2020 and December 31, 2019 comparave statements of nancial posion and related notes have been re-presented retrospecvely based
on the accounng policies as outlined in note 3.4.4.
The accompanying notes form an integral part of these consolidated nancial statements.
252 | Consolidated Statements of Profit or Loss
Consolidated Statements of Comprehensive Income and Loss | 253
Consolidated Statements of
Profit or Loss
Consolidated Statements of
Comprehensive Income/Loss
(In USD thousands $ except for shares and EPS) Note
Year Ended
December
31, 2021
Year Ended
December
31, 2020
(*)
Year Ended
December
31, 2019
(*)
Revenue 16 497,277 41,243 78,462
Other operang income 17, 7 42,141 23,668 15,563
Total operang income 539,418 64,911 94,025
Research and development expenses 19 (580,520 ) (370,885 ) (220,771 )
Selling, general and administrave expenses 20 (307,644 ) (171,643 ) (72,146 )
Total operang expenses (888,164 ) (542,528 ) (292,917 )
Operang loss (348,746 ) (477,617 ) (198,892 )
Financial income/(expense) 23 (944 ) (1,501 ) 15,983
Exchange gains/(losses) 23 (50,053 ) (126,234 ) 6,990
Loss before taxes
(399,743 ) (605,352 ) (175,919 )
Income tax expense 24 (8,522 ) (3,103 ) (5,289 )
Loss for the year
(408,265 ) (608,455 ) (181,208 )
Loss for the year aributable to:
Owners of the parent (408,265 ) (608,455 ) (181,208 )
Weighted average number of shares outstanding 51,075,827 45,410,442 38,619,121
Basic and diluted loss per share (in $) 25 (7.99 ) (13.40 ) (4.69 )
(In USD thousands $ except for shares) Note
Year Ended
December
31, 2021
Year Ended
December
31, 2020
(*)
Year Ended
December
31, 2019
(*)
Loss for the year
(408,265 ) (608,455 ) (181,208 )
Items that may be reclassied subsequently
to prot or loss, net of tax
Currency translaon dierences, arisen from
translang foreign acvies
(3,048 ) — —
Translaon eect — 162,273 (8,587 )
Items that will not be reclassied subsequently
to prot or loss, net of tax
Fair value gain/(loss) on investments in equity instruments
designated as at FVTOCI
7 (39,290 ) — —
Other comprehensive loss, net of income tax (42,338 ) 162,273 (8,587 )
Total comprehensive loss aributable to:
Owners of the parent (450,603 ) (446,182 ) (189,795 )
*
The Company has adopted a change in its presentaon currency from EUR to USD at January 1, 2021, as described in note 3.4.4. Accordingly, the
December 31, 2020 and December 31, 2019 comparave statements of prot and loss and related notes have been re-presented retrospecvely based on
the accounng policies as outlined in note 3.4.4.
The accompanying notes form an integral part of these consolidated nancial statements.
*
The Company has adopted a change in its presentaon currency from EUR to USD at January 1, 2021, as described in note 3.4.4. Accordingly, the
December 31, 2020 and December 31, 2019 comparave statements of comprehensive income and loss and related notes have been re-presented
retrospecvely based on the accounng policies as outlined in note 3.4.4.
The accompanying notes form an integral part of these consolidated nancial statements.
PART VII
Consolidated Statements of Cash Flows
254 | Consolidated Statements of Cash Flows
Consolidated Statements of Changes in Equity | 255
Cash ow (used in) / from operang acvies
(In thousands of $)
NOTE
Year Ended
December
31, 2021
Year Ended
December
31, 2020
(*)
Year Ended
December
31, 2029
(*)
Operang loss (348,746 ) (477,617 ) (198,892 )
Adjustments for non-cash items
Amorzaon of intangible assets 5 776 246 43
Depreciaon of property, plant and equipment 6 5,091 3,671 2,382
Provisions for employee benets 260 76 64
Expense recognized in respect of share-based payments 14 179,366 96,932 44,236
Fair value gains on non-current nancial assets at fair value
through prot or loss
(11,152 ) (2,951 ) (1,214 )
Non-cash revenue 7 (75,000 ) — —
(249,405 ) (379,643 ) (153,381 )
Movements in current assets/liabilies
(Increase)/decrease in trade and other receivables 10 (31,632 ) 21,961 (25,709 )
(Increase)/decrease in inventories 9 (83,880 ) (23,852 ) —
(Increase)/decrease in other current assets (30,990 ) (16,189 ) (5,788 )
Increase/(decrease) in trade and other payables 15 134,892 50,537 53,729
Increase/(decrease) in deferred revenue – current 16 (46,327 ) (40,441 ) 69,526
Movements in non-current assets/liabilies
(Increase)/decrease in other non-current assets (13,975 ) (10,299 ) (6,224 )
Increase/(decrease) in deferred revenue – non-current 16 (269,039 ) 2,655 224,492
Cash ows (used in)/from operang acvies (590,356 ) (395,272 ) 156,645
Interest paid (684 ) (401 ) (139 )
Income taxes paid (15,772 ) (2,791 ) (4,876 )
Net cash ow (used in) / from operang acvies (606,812 ) (398,463 ) 151,630
Purchase of intangible assets 5 (117,811 ) (4,071 ) (44,939 )
Purchase of property, plant and equipment 6 (3,623 ) (1,068 ) (1,796 )
(Increase)/decrease in nancial assets – current 11 (228,239 ) 341,869 (792,655 )
Interest received 2,603 7,962 6,122
Net cash ow (used in) / from invesng acvies (347,070 ) 344,692 (833,267 )
Principal elements of lease payments 22 (3,855 ) (2,550 ) (1,515 )
Proceeds from issue of new shares 13 1,091,326 813,186 755,641
Issue costs paid 13 (528 ) (613 ) (25,747 )
Exchange gain from currency conversion on proceeds from issue
of new shares
Proceeds from exercise of stock opons 13 33,433 22,912 5,345
Net cash ow (used in) / from nancing acvies 1,121,342 833,003 733,726
Net increase (decrease) in cash & cash equivalents 167,460 779,232 52,088
Cash and cash equivalents at the beginning of the period 1,216,803 372,162 321,791
Exchange gains/(losses) on cash & cash equivalents (49,587 ) 65,409 (1,717 )
Cash and cash equivalents at the end of the period 1,334,676 1,216,803 372,162
Consolidated Statements of
Changes in Equity
Aributable to owners
of the parent
(*)
(In thousands of $)
Share
capital
Share
premium
Accumulated
losses
Translaon
dierences
Other
reserves
Total equity
aributable
to owners of
the parent
Total
equity
Balance at January 1, 2019 4,451 796,894 (202,270 ) (18,954 ) 36,341 616,462 616,462
Loss for the year (181,208 ) (181,208 ) (181,208 )
Other comprehensive income / (loss) (8,587 ) (8,587 ) (8,587 )
Total comprehensive loss
of the period
(181,208 ) (8,587 ) (189,795 ) (189,795 )
Share-based payment 44,236 44,236 44,236
Issue of share capital 710 756,472 757,182 757,182
Transacon costs for equity issue (25,476 ) (25,476 ) (25,476 )
Accounng treatment of the share
subscripon agreement
(27,635 ) (27,635 ) (27,635 )
Exercise of stock opons 48 5,386 5,434 5,434
Balance year ended
December 31, 2019
Loss for the year (608,455 ) (608,455 ) (608,455 )
Other comprehensive income / (loss) 162,273 162,273 162,273
Total comprehensive loss
of the period
(608,455 ) 162,273 (446,182 ) (446,182 )
Income tax benet from
excess tax deducons related
to share-based payments
Share-based payment 96,932 96,932 96,932
Issue of new shares 468 812,718 813,186 813,186
Transacon costs for equity issue (613 ) (613 ) (613 )
Exercise of stock opons 67 21,287 21,354 21,354
Balance year ended
December 31, 2020
Loss for the year (408,265 ) (408,265 ) (408,265 )
Other comprehensive income / (loss) (3,048 ) (39,290 ) (42,338 ) (42,338 )
Total comprehensive loss of the
period
(408,265 ) (3,048 ) (39,290 ) (450,603 ) (450,603 )
Income tax benet from
excess tax deducons related
to share-based payments
Share-based payment 179,366 179,366 179,366
Issue of new shares 430 1,090,896 1,091,326 1,091,326
Transacon costs for equity issue (528 ) (528 ) (528 )
Exercise of stock opons 59 33,374 33,433 33,433
Balance year ended
December 31, 2021
*
The Company has adopted a change in its presentaon currency from EUR to USD at January 1, 2021, as described in note 3.4.4. Accordingly, the
December 31, 2020 and December 31, 2019 comparave statements of prot and loss and related notes have been re-presented retrospecvely based on
the accounng policies as outlined in note 3.4.4.
The accompanying notes form an integral part of these consolidated nancial statements.
*
The Company has adopted a change in its presentaon currency from EUR to USD at January 1, 2021, as described in note 3.4.4. Accordingly, the
December 31, 2020 and December 31, 2019 comparave statements of prot and loss and related notes have been re-presented retrospecvely based on
the accounng policies as outlined in note 3.4.4.
Please refer to note 13 for more informaon on the share capital and movement in number of shares. See also note 14
for more informaon on the share-based payments.
The accompanying notes form an integral part of these consolidated nancial statements.
PART VII
256 | Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements | 257
Notes to the Consolidated
Financial Statements
1 General information about the company
company (COC 24435214) has its ocial seat in Roerdam, the Netherlands, and its registered oce is at Willemstraat 5,
argenx SE is a publicly traded company with ordinary shares listed on Euronext Brussels under the symbol “ARGX” since
July 2014 and with American Depositary Shares listed on Nasdaq under the symbol “ARGX” since May 2017.
2 Impacts of COVID-19 on Our Business
The current unprecedented challenges as a result of the COVID-19 outbreak have impacted how we operate. We have been
taking, and connue to take, the necessary steps in terms of safety, risk migaon, and nancial measures to best manage
through these challenging mes. We have currently experienced limited impact on our nancial performance and nancial
posion, although we connue to face addional risks and challenges associated with the impact of the outbreak.
3 Significant Accounting Policies
The signicant Company’s accounng policies are summarized below.
3.1 Statement of compliance and basis of preparation
The consolidated nancial statements are prepared in accordance with the Internaonal Financial Reporng Standards
(IFRS), issued by the Internaonal Accounng Standards Board (IASB) and the interpretaons issued by the IASB’s Inter
-
naonal Financial Reporng Interpretaon Commiee. The consolidated nancial statements provide a general overview
of the Company’s acvies and the results achieved. They present fairly the enty’s nancial posion, its nancial perfor
-
mance and cash ows, on a going concern basis.
The signicant accounng policies applied in the preparaon of the above consolidated nancial statements are set out
below. All amounts are presented in thousands of dollar, unless otherwise indicated, rounded to the nearest $ ‘000.
The consolidated nancial statements have been approved for issue by the Company’s Board of Directors (the “Board”)
on March 18, 2022.
3.2 Adoption of New and Revised Standards
New standards and interpretaons applicable for the annual period beginning on January 1, 2021
New standards and interpretaons for the annual period beginning on January 1, 2021 did not have any material impact
on our consolidated nancial statements.
New standards and interpretaons issued, but not yet applicable for the annual period beginning on January 1, 2021
We have not early adopted any other standard, interpretaon, or amendment that has been issued but is not yet eecve.
Of the standards that are not yet eecve, we expect no standard to have a material impact on our nancial statements in
the period of inial applicaon.
3.3 Basis of Consolidation
The consolidated nancial statements include the nancial statements of the Company and enes controlled by the
Company (its subsidiaries). Control is achieved when the Company;
• has power over the investee;
• is exposed, or has rights, to variable returns from its involvement with the investee; and
• has the ability to use its power to aect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control listed above.
The results of the subsidiaries are included in the consolidated statements of prot or loss and consolidated statements
of other comprehensive income from the eecve date of acquision up to the date when control ceases to exist. When
necessary, adjustments are made to the nancial statements of subsidiaries to bring their accounng policies into line
with those used by other members of the Group.
All inter-company transacons and unrealized gains on transacons between group companies are eliminated. Unrealised
losses are also eliminated unless the transacon provides evidence of an impairment of the transferred asset.
3.4 Foreign Currency Transactions
3.4.1 Functional and Presentation Currency
Items included in the consolidated nancial statements of each of our enes are valued using the currency of their
economic environment in which the enty operates. As of January 1, 2021, the consolidated nancial statements are
presented in USD ($), which is the Company’s presentaon currency.
3.4.2 Transactions and Balances
Transacons in foreign currencies are translated at the exchange rate ruling at the date of the transacon. Monetary
assets and liabilies denominated in foreign currencies are translated at the exchange rate ruling at the reporng date.
Foreign exchange dierences arising on translaon are recognized in the consolidated statements of prot or loss and
the consolidated statements of other comprehensive income. Non monetary assets and liabilies denominated in foreign
currencies are translated at the foreign exchange rate ruling at the date of the transacon.
3.4.3 Financial Statements of Foreign Entities
For foreign enes using a dierent funconal currency than USD:
• assets and liabilies for each balance sheet presented are translated at the closing rate at the date of the balance
sheet.
•
income and expenses for each statement presenng prot or loss and statements of statements of other comprehensive
income are translated at average exchange rates (unless this average is not a reasonable approximaon of the cumulave
eect of the rates prevailing on the transacon dates, in which case income and expenses are translated at the rate on the
dates of the transacons).
• all resulng exchange dierences are recognised in the statements other comprehensive income.
3.4.4 Change in functional and presentation currency as of January 1, 2021
As of January 1, 2021, the Company changed its funconal and presentaon currency from EUR to USD. The change in
funconal currency was made to reect that USD has become the predominant currency in the Company, represenng a
signicant part of the Company’s cash ows and nancing. The change has been implemented with prospecve eect.
The change in presentaon currency, eecve January 1, 2021, from EUR to USD is retroacvely applied on comparave
gures according to IAS 8 and IAS 21, as if USD had always been the presentaon currency of the consolidated nancial
statements. The change was made to beer reect the economic footprint of the Company’s business going forward. The
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Company believes that the presentaon currency change will give investors and other stakeholders a clearer understand
-
ing of the Company’s performance over me.
Comparison gures in the consolidated statements of nancial posion, the consolidated statements of prot or loss and
the consolidated statements of other comprehensive income, the consolidated statements of changes in equity, consol
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idated statements of cash ows, and all disclosures have been re-presented, unless otherwise stated, using the proce
-
dures outlined below:
• Assets and liabilies are translated into USD at the closing rates applicable at the end of each reporng period.
• Income and expenses are translated at exchange rates at the dates of the respecve transacon or average rates where
these are a suitable proxy.
• Dierences resulng from the re-presentaon have been presented as translaon dierence, a component within
shareholders’ equity.
• Share capital, share premium, and other reserves are translated at historic rates prevailing at the date of transacon.
3.5 Intangible Assets
3.5.1 Internally Generated Intangible Assets
Expenditure on research acvies is recognized as an expense in the period in which it is incurred.
An internally generated intangible asset arising from development (or from the development phase of an internal proj
-
ect) is recognized if, and only if, all of the following have been demonstrated:
• the technical feasibility of compleng the intangible asset so that it will be available for use or sale;
• the intenon to complete the intangible asset and use or sell it;
• the ability to use or sell the intangible asset;
• how the intangible asset will generate probable future economic benets;
• the availability of adequate technical, nancial and other resources to complete the development and to use or sell
the intangible asset; and
• the ability to measure reliably the expenditure aributable to the intangible asset during its development.
The amount inially recognized for internally generated intangible assets is the sum of the expenditure incurred from the
date when the intangible asset rst meets the recognion criteria listed above. Where no internally generated intangible
asset can be recognized, development expenditures are recognized in the consolidated statements of prot or loss and
the consolidated statements of other comprehensive income in the period in which they are incurred.
Due to uncertaines inherent to the development and registraon with the relevant healthcare authories of its prod
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ucts, the Company esmates that the condions for capitalizaon are not met unl the regulatory procedures required
by such healthcare authories have been nalized.
3.5.2 Acquired In-Process R&D, Software and Databases and Other intangible assets
Intangible assets with nite useful lives that are acquired separately related to in-process research and development proj
-
ects, soware and databases and other intangible assets are carried at cost less accumulated amorzaon and accumulated
impairment losses. Intangible assets with indenite useful lives are carried at cost less accumulated impairment losses.
Payments for acquired in-process research and development projects obtained through in-licensing arrangements are
capitalized as intangible assets provided that they are separately idenable, controlled by the Company and expected to
provide future economic benets. As the probability criterion in IAS 38 is always considered to be sased for separate
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ly acquired research and development assets and the amount of the payments is determinable, upfront and milestone
payments to third pares for pharmaceucal products or compounds for which regulatory markeng approval has not
yet been obtained are recognized as intangible assets.
Other intangible assets includes the Priority Review Voucher (“PRV”) acquired in 2020 which the Company can use to
obtain the priority review by the FDA for one of its future regulatory submissions or may sell or transfer to a third party.
The PRV is measured at cost and reviewed for impairment when events or circumstances indicate that the carrying value
may not be recoverable. At the me the Company commits using the PRV to accelerate the review of a drug applicaon,
the intangible asset will be amorzed and derecognized upon ling of the related Biologic License Applicaon.
3.5.3. Amortization of Intangible Assets
Intangible assets, which comprises of acquired in-process research and development, soware and databases and other
intangible assets, are amorzed on a straight-line basis over the esmated useful life as from the me they are available
for use, or when the underlying drug candidate is approved, generally on the following basis:
• Acquired In-Process R&D – the longer of the patent protecon life and the useful life of the combined product
• Soware and Databases – 3 – 5 years
The esmated useful life and amorzaon method are reviewed at the end of each reporng period, with the eect of
any changes in esmate being accounted for on a prospecve basis.
3.5.4 Derecognition of Intangible Assets
An intangible asset is derecognized either on disposal or when no future economic benets are expected from its use.
Gains or losses arising from derecognion of an intangible asset, measured as the dierence between the net disposal
proceeds, if any, and the carrying amount of the asset, are recognized in the consolidated statements of prot or loss and
the consolidated statements of other comprehensive income when the asset is derecognized.
3.6 Property, plant and equipment
Items of property, plant and equipment held for use in the producon or supply of goods or services, or for administrave
purposes, are stated in the statement of nancial posion at their cost, less accumulated depreciaon and impairment losses.
Depreciation is recognized as from acquisition date onwards (unless asset is not ready for use) so as to write off the
cost or valuation of assets (other than freehold land and properties under construction) less their residual values over
their useful lives, using the straight line method. The estimated useful lives, residual values and depreciation method
are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a pro
-
spective basis.
Unless revised due to specic changes in the esmated useful life, annual depreciaon rates are as follows:
• Oce and lab equipment: 3–5 years
• IT equipment: 3 years
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item
of property, plant and equipment is determined as the difference between the sales proceeds, if any, and the carrying
amount of the asset and is recognized in the consolidated statements of profit or loss and the consolidated statements
of other comprehensive income.
3.7 Inventories
Inventories are carried at cost or net realisable value, whichever is lowest. Cost is determined using the rst-in, rst-out
method. Cost comprises of costs of purchase, costs of conversion and other costs incurred in bringing the inventories to
their present locaon and condion.
If the expected sales price less compleon costs to execute sales (net realizable value) is lower than the carrying amount,
a write-down is recognised for the amount by which the carrying amount exceeds its net realisable value.
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Included in inventory are products which could, besides commercial acvies, be used in preclinical and clinical programs
as well as in non-reimbursed pre-approval access program. These products are charged to research & development ex
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penses or selling, general and administrave expenses, respecvely, when dedicated to this channel.
We capitalize inventory costs associated with products prior to the regulatory approval of these products, or for inven
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tory produced in producon facilies not yet approved, when it is highly probable that the pre-approval inventories will
be saleable. The determinaon to capitalize is based on the parcular facts and circumstances relang to the expected
regulatory approval of the product or producon facility being considered. The assessment of whether or not the product
is considered highly probable to be saleable is made on a quarterly basis and includes, but is not limited to, how far a
parcular product or facility has progressed along the approval process, any known safety or ecacy concern, potenal
labelling restricons and other impediments.
Previously capitalized costs related to pre-launch inventories could be required to be wrien down upon a change in such
judgement or due to a denial or delay of approval by regulatory bodies, a delay in commercializaon or other potenal
factors, which will be recorded to research and development expenses.
3.8 Leases
The Company assesses whether a contract is or contains a lease, at incepon of the contract. The Company recognises
a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee,
except for short-term leases (dened as leases with a lease term of 12 months or less) and leases of low value assets. For
these leases, the Company recognises the lease payments as an operang expense on a straight-line basis over the term
of the lease unless another systemac basis is more representave of the me paern in which economic benets from
the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commence
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ment date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the lessee
uses its incremental borrowing rate. The lease liability is subsequently measured by increasing the carrying amount
to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to
reflect the lease payments made. The lease liability is presented as a separate line in the consolidated statements of
financial position.
The right-of-use assets comprise the inial measurement of the corresponding lease liability, lease payments made at
or before the commencement day, less any lease incenves received and any inial direct costs. They are subsequently
measured at cost less accumulated depreciaon and impairment losses. Right-of-use assets are depreciated over the
shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset
or the cost of the right-of-use asset reects that the Company expects to exercise a purchase opon, the related right-of-
use asset is depreciated over the useful life of the underlying asset. The right-of-use assets are presented in the consoli
-
dated statements of nancial posion under the capon “Property, plant and equipment”.
3.9 Impairment of Assets
3.9.1 Financial Assets
The impairment loss of a nancial asset measured at amorsed cost is calculated based on the expected loss model.
For trade receivables, in the absence of a signicant nancing component, the allowance is measured at an amount equal
to lifeme expected credit losses. Those are the expected credit losses that result from possible default events over the
expected life of those trade receivables.
3.9.2 Property, Plant and Equipment and Intangible Assets
At the end of each reporng period, the Company reviews the carrying amounts of its tangible and intangible assets
to determine whether there is any indicaon that those assets have suered an impairment loss. If any such indicaon
exists, the recoverable amount of the asset is esmated in order to determine the extent of the impairment loss, if any.
Where it is not possible to esmate the recoverable amount of an individual asset, the Company esmates the recover
-
able amount of the cash generang unit to which the asset belongs.
Intangible assets with indenite useful lives and intangible assets not yet available for use are tested for impairment at
least annually, and whenever there is an indicaon that the asset may be impaired.
If the recoverable amount of an asset or cash generang unit is esmated to be less than its carrying amount, the carry
-
ing amount of the asset or cash generang unit is reduced to its recoverable amount. An impairment loss is recognized
immediately in the statement of prot or loss and the statement of other comprehensive income.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised esmate
of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would
have been determined had no impairment loss been recognized for the asset or cash generang unit in prior years. A
reversal of an impairment loss is recognized immediately in prot or loss.
3.10 Financial Instruments
Financial assets and nancial liabilies are recognized in the consolidated statements of nancial posion when the Com
-
pany becomes party to the contractual provisions of the instrument. The Company does not use currency derivaves to
hedge planned future cash ows, nor does it make use of forward foreign exchange contracts. Addionally, the Company
does not have nancial debt at December 31, 2021.
3.10.1 Financial Assets
Financial assets are inially recognized either at fair value or at transacon price. All recognized nancial assets are
subsequently measured at either amorzed cost or fair value under IFRS 9 on the basis of both the Company’s model for
managing the nancial assets and the contractual cash ow characteriscs of the nancial asset.
• A nancial asset that (i) is held within a business model whose objecve is to collect the contractual cash ows and
(ii) has contractual cash ows that are solely payments of principal and interest on the principal amount outstanding
is measured at amorzed cost (net of any write down for impairment), unless the asset is designated at fair value
through prot or loss (FVTPL) under the fair value opon.
• A nancial asset that (i) is held within a business model whose objecve is achieved both by collecng contractual cash
ows and selling nancial assets and (ii) has contractual term that give rise on specied dates to cash ows that are
solely payments of principal and interest on the principal outstanding, is measured at fair value through other compre
-
hensive income (FVTOCI), unless the asset is designated at FVTPL under the fair value opon.
• All other nancial assets are measured at FVTPL.
A nancial asset is classied as current when the cash ows expected to ow from the instrument mature within one year.
The Company derecognized a nancial asset when the contractual rights to the cash ows from the asset expire, or the
Company transfers the right to receive the contractual cash ows on the nancial asset in a transacon in which substan
-
ally all the risks and rewards of ownership of the nancial asset are transferred.
The Company classies non-derivave nancial assets into the following categories;
• nancial asset at fair value through prot or loss or OCI (non-current nancial assets, current nancial assets and cash
equivalents)
• nancial assets at amorzed cost (receivables and cash and cash equivalents)
Financial assets at fair value through prot or loss or OCI
Financial assets are designated at fair value through prot or loss if the Company manages such investments and makes
purchases and sales decisions based on their fair value in accordance with the Company’s investment strategy. Aribut
-
able transacon costs are recognised in the consolidated statements of prot or loss and the consolidated statements of
other comprehensive income as incurred. Financial assets at fair value through prot or loss are measured at fair value,
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and changes therein, which take into account any dividend income, are recognized in the consolidated statements of
prot or loss and the consolidated statements of other comprehensive income.
3.10.1.1 Non-current nancial assets at fair value through prot or loss or OCI
The Company holds investments in non-current nancial assets, which based on IFRS 9, are designated as nancial assets
at fair value through prot or loss or nancial assets at fair value through OCI. The fair value of listed investments is
based upon the closing price of such securies at each reporng date. If there is no acve market for an equity instru
-
ment, the Company establishes the fair value by using valuaon techniques.
Based on IFRS 9, the Company irrevocably elected to designate specic investments as a nancial asset at fair value
through OCI as the parcipaon is not held for trading purposes nor conngent consideraon recognised by an acquirer
in a business combinaon.
3.10.1.2 Current nancial assets at fair value through prot or loss
Current nancial assets include nancial assets measured at fair value through prot or loss and comprise of money mar
-
ket funds and term accounts that have an inial maturity equal or less than 12 months, but exceeding 3 months.
3.10.1.3 Cash equivalents measured at fair value through prot or loss
Cash equivalents measured at fair value through prot or loss may comprise of term accounts that have an inial ma
-
turity of equal or less than 3 months and money market funds that are readily converble to cash and are subject to
insignicant risk of changes in value. These nancial assets are used by the Company in the management of the short-
term commitments.
Financial Assets at Amorzed Cost
3.10.1.4 Receivables
Trade and other receivables are designated as nancial assets measured at amorzed cost. They are inially measured
either at fair value or at transacon price, in the absence of a signicant nancing component.
All receivables are subsequently measured at amorzed cost, which generally corresponds to nominal value less expect
-
ed credit loss provision.
Receivables mainly comprise trade and other receivables and current and non-current research and development incen
-
ve receivables. These research and development incenve receivables relate to refunds resulng from research and
development incenves on research and development expenses in Belgium and are credited to the consolidated state
-
ments of prot or loss and the consolidated statements of other comprehensive income under the line “Other operang
income” when the relevant expenditure has been incurred and there is a reasonable assurance that the research and
development incenves are receivable.
3.10.1.5 Cash
Cash are nancial assets measured at amorzed cost and comprise of cash balances and savings accounts.
3.10.1.6 Cash equivalents measured at amorzed costs
Cash equivalents measured at amorzed cost comprise of term accounts that have an inial maturity of less than 3
months that are subject to an insignicant risk of changes in values. The nancial assets are used by the Company in the
management of short-term commitments.
Cash and cash equivalents exclude restricted cash, which is presented in the consolidated statements of nancial posion
under the line “Other non-current assets”.
3.10.1.7 Current nancial assets measured at amorzed costs
Current nancial assets include nancial assets measured at amorzed costs and comprise of term accounts that have an
inial maturity equal or less than 12 months, but exceeding 3 months.
3.10.2 Financial Liabilities
Financial liabilies are inially measured at their transacon price. Subsequent to inial recognion, nancial liabilies
are measured at amorzed cost.
Financial liabilies mainly comprise of trade and other liabilies.
Trade and other liabilies are comprised of liabilies that are due less than one year from the balance sheet date and
are in general not interest bearing and seled on an ongoing basis during the nancial year. They also include accrued
expense related to the Company’s research and development costs.
3.11 Shareholder’s equity
An equity instrument is any contract that evidences a residual interest in the assets of an enty aer deducng all of its
liabilies. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.
The Company has never distributed any dividends to its shareholders. As of December 31, 2021, no prots were available
for distribuon.
3.12 Short term employee benefits
Short term employee benets include payables and accruals for salaries and bonuses to be paid to the employees of the
Company. They are recognized as expenses for the period in which employees perform the corresponding services.
3.13 Share based payments
Equity seled share based payments to employees and others providing similar services are measured at the fair value of
the equity instruments at the acceptance date.
The fair value determined at the acceptance date of the equity seled share based payments is expensed on a straight
line basis over the vesng period, based on the Company’s esmate of equity instruments that will eventually vest, with
a corresponding increase in equity. At the end of each reporng period, the Company revises its esmate of the number
of equity instruments expected to vest. The impact of the revision of the original esmates, if any, is recognized in the
consolidated statements of prot or loss and the consolidated statements of other comprehensive income such that the
cumulave expense reects the revised esmate, with a corresponding adjustment to the equity seled share based
payment reserve.
3.14 Deferred revenue
Current and non-current deferred revenue relates to cash received from collaboraon & license agreements prior to
compleon of the earnings process. These payments are recognized as revenue over the esmated duraon of the Com
-
pany’s involvement in the research and development programs provided for under the terms of the agreements.
3.15 Income taxes
Income tax in the consolidated statements of prot or loss and the consolidated statements of other comprehensive
income represents the total of the current tax and deferred tax.
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The current tax is based on taxable profit for the year. Taxable profit differs from profit as reported in the state
-
ment of profit and loss and statement of other comprehensive income as it excludes items of income or expense
that are taxable or deductible in other years and items that are never taxable or deductible. The Company’s liabil
-
ity for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the
reporting period.
Deferred tax is recognized on temporary dierences between the carrying amounts of assets and liabilies in the consoli
-
dated nancial statements and the corresponding tax basis used in the computaon of taxable prot. Deferred tax assets
are recognized to the extent that it is probable that future taxable prots will be available against which those deducble
temporary dierences can be ulized. The carrying amount of deferred tax assets is reviewed at the end of each report
-
ing period and reduced to the extent that it is no longer probable that sucient taxable prots will be available to allow
all or part of the asset to be recovered. Deferred tax assets and liabilies are oset if there is a legally enforceable right
to oset current tax liabilies and assets, and they relate to income taxes levied by the same tax authority on the same
taxable enty, or on dierent taxable enes which intend either to sele current tax liabilies and assets on a net basis,
or to realize the assets and sele the liabilies simultaneously.
Deferred tax assets and liabilies are measured at the tax rates that are expected to apply in the period in which the
liability is seled or the asset realized, based on tax rates (and tax laws) that have been enacted or substanally enacted
by the end of the reporng period.
3.16 Revenue and other operating income recognition
3.16.1 Collaborations and license agreements
Revenues to date have consisted principally of milestones, license fees, non-refundable upfront fees and research and
development service fees in connecon with collaboraon and license agreements.
The Company recognizes revenue when the customer obtains control of promised goods or services, in an amount that
reects the consideraon that the Company expects to receive in exchange for those goods and services. In order to
determine revenue recognion for agreements that the Company determines to be in the scope of IFRS 15, following ve
steps are performed:
1. Idenfy the contracts
In its current collaboraon and license agreements, the Company is mainly licensing its intellectual property and/or pro
-
viding research and development products/services, which might include a cost sharing mechanism and/or in the future,
selling its products to collaborave partner enes. Revenue is generated through these arrangements via upfront pay
-
ments, milestone payments based on clinical and regulatory criteria, research and development service fees and future
sales based milestones and sales based royales. In some cases, the collaboraon and license agreements also include an
equity subscripon component. If this is the case, the Company analyses if the criteria to combine contracts, as set out
by IFRS 15, are met.
2. Idenfy performance obligaons
Depending on the type of the agreement, there can be one or more disnct performance obligaons under IFRS 15. This
is based on an assessment of whether the promises in an agreement are capable of being disnct and are disnct from
the other promises to transfer goods and/or services in the context of the contract.
For our material ongoing collaboraon and license agreement (i.e. the Zai Lab Agreement), the Company has assessed
that there is more than one disnct performance obligaon, being the transfer of a license and supply of clinical and
commercial product.
This is because the Company considers the performance obligations is distinct in the context of the contract as the
license has stand-alone value without the Company being further involved in the research and development col
-
laboration and that there is no interdependence between the license and the clinical and commercial supply to be
provided.
For other material collaboraon and license agreements, the Company has assessed that there is one single performance
obligaon in our collaboraon and license agreements, being the transfer of a license combined with performance of
research and development services.
3. Determine the transacon price
Our material ongoing collaboraon and license agreements include non-refundable upfront payments or license fees;
milestone payments, the receipt of which is dependent upon the achievement of certain clinical, regulatory or commer
-
cial milestones; royales on sales and research and development service fees.
3.1 Non-refundable upfront payments or license fees
If the license to the Company’s intellectual property is determined to be disnct from the other performance obligaons
idened in the arrangement, the Company recognizes revenue from non-refundable upfront fees allocated to this license
at the point in me the license is transferred to the customer and the customer has the right to use the license.
For all our material ongoing collaboraon and license agreements, the Company considers the performance obligaons
related to the transfer of the license as disnct from the other promises to transfer goods and/or services. The Company
ulizes judgement to assess the nature of the performance obligaon to determine whether the performance obligaon is
sased over me or at a point in me. If over me, revenue is then recognized based on a paern that best reects the
transfer of control of the service to the customer.
A milestone payment, being a variable consideraon, is only included in the transacon price to the extent it is highly
probable that a signicant reversal in the amount of cumulave revenue recognion will not occur when the uncertainty
associated with the variable consideraon is subsequently resolved. The Company esmates the amount to be included
in the transacon price upon achievement of the milestone event. The transacon price is then allocated to each perfor
-
mance obligaon on a stand-alone selling price basis, for which the Company recognizes revenue as or when the perfor
-
mance obligaons under the contract are sased. At the end of each reporng period, the Company re-evaluates the
probability of achievement of such milestones and any related constraint, and, if necessary, adjusts the esmate of the
overall transacon price. Any such adjustments are recorded on a cumulave catch-up basis, which would aect revenue
and earnings in the period of adjustment.
Our material ongoing collaboraon and license agreements may include reimbursement or cost sharing for research and
development services. R&D services are performed and sased over me given that the customer simultaneously re
-
ceives and consumes the benets provided by us. Such costs reimbursements received are recognized in revenues when
costs are incurred and agreed by the pares.
Our material ongoing collaboraon and license agreements include sales based royales, including commercial milestone
payments based on the level of sales, and the license has been deemed to be the predominant item to which the royales
and commercial milestone payments relate. Related revenue is recognized as the subsequent underlying sales occur.
4. Allocate the transacon price
In principle, an enty shall allocate the transacon price to each performance obligaon idened in the contract on
a relave stand-alone selling price basis. As our ongoing collaboraon and license agreement (i.e. the Zai Lab Agree
-
ment) contains more than one performance obligaon, the Company assess to allocate the transacon price to all
performance obligaons idened.
5. Recognize revenue
Revenue is recognized when the customer obtains control of the goods and/or services as provided in the collaboraon
and license agreements. The control can be transferred over me or at a point in me – which results in the recognion
of revenue over me or at a point in me.
As our ongoing collaboraon and license agreement (i.e. the Zai Lab Agreement) contains more than one performance
PART VII
266 | Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements | 267
obligaon, the Company recognized revenue at point in me for transfer of license and the Company recognizes revenue
over me for supply of clinical and commercial products as customer simultaneously receive the benets provided by the
Company’s performance, sased over me.
Other ongoing collaboraon and license agreements only contain one single performance obligaon which is, as the
customer simultaneously receive the benets provided by the Company’s performance, sased over me. As such, the
Company recognizes revenue over me.
The recognion of revenue over me is based on a paern that best reects the sasfacon of the related performance
obligaon, applying the input method. The input method esmates the sasfacon of the performance obligaon as the
percentage of total collaboraon costs that are completed each period compared to the total esmated collaboraon costs.
Research and development service fees are recognized as revenue when costs are incurred and agreed by the pares as
the Company is acng as a principal in the scope of its stake of the research and development acvies of its ongoing
collaboraon and license agreements.
3.16.2 Grants, research and development incentives, payroll tax rebates and changes in fair value on
non-current financial assets
Because it carries out extensive research and development activities, the Company benefits from various grants,
research and development incentives and payroll tax rebates from certain governmental agencies. These grants,
research and development incentives and payroll tax rebates generally aim to partly reimburse approved expenditures
incurred in research and development efforts of the Company and are credited to the consolidated statements of prof
-
it or loss and the consolidated statements of other comprehensive income, under the line “Other operating income”,
when the relevant expenditure has been incurred and there is reasonable assurance that the grants or research and
development incentives are receivable. Fair value gains resulting from the change in the fair value of non-current
financial assets are credited to the consolidated statements of profit or loss and the consolidated statements of other
comprehensive income, under the line “Other operating income”.
3.17 Segment reporting
Segment results include revenue and expenses directly aributable to a segment and the relevant poron of revenue and
expenses that can be allocated on a reasonable basis to a segment. Segment assets and liabilies comprise those operat
-
ing assets and liabilies that are directly aributable to the segment or can be allocated to the segment on a reasonable
basis. Segment assets and liabilies do not include income tax items.
The Company manages its acvies and operates as one business unit which is reected in its organizaonal structure
and internal reporng. The Company does not disnguish in its internal reporng dierent segments, neither business
nor geographical segments. The chief operang decision maker is the Board of Directors.
4. Critical Accounting Judgements and Key Sources
In the applicaon of the Company’s accounng policies, which are described above, the Company is required to make
judgments, esmates and assumpons about the carrying amounts of assets and liabilies that are not readily apparent
from other sources. The esmates and associated assumpons are based on historical experience and other factors that
are considered to be relevant. Actual results may dier from these esmates.
The esmates and underlying assumpons are reviewed on an ongoing basis. Revisions to accounng esmates are
recognized in the period in which the esmate is revised if the revision aects only that period or in the period of the
revision and future periods if the revision aects both current and future periods.
The following areas are areas where key assumpons concerning the future, and other key sources of esmaon uncer
-
tainty at the end of the reporng period, have a signicant risk of causing a material adjustment to the carrying amounts
of assets and liabilies within the next nancial year.
Critical estimates in applying accounting policies
Research and development cost accruals
The Company recognizes costs of $163.7 million, as specied in note 15 to the nancial statements, incurred for clinical
trial acvies and manufacturing of drug products, as research and development expenses based on an evaluaon of
its vendors’ progress toward compleon of specic tasks. Timing of payment may dier signicantly from the period in
which the costs are recognized as expense, resulng in clinical trial accruals recognized within “Trade and other pay
-
ables” in the consolidated statements of nancial posion.
Quancaon of the research progress and the translaon of the progress to these accruals requires esmates, because
the progress is not directly observable. In esmang the vendors’ progress toward compleon of specic tasks, the
Company therefore uses non-nancial data such as paent enrollment, clinical site acvaons and vendor informaon
of actual costs incurred. This data is obtained through reports from or discussions with Company personnel and outside
service providers as to the progress or state of compleon of trials, or the compleon of services. Costs are expensed
over the service period the services are provided. Costs for services provided that have not yet been paid are recognized
as accrued expenses.
PART VII
268 | Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements | 269
5 Intangible assets
The Company performed an annual impairment review on the intangible assets not yet available for use. This review did
not result in the recognion of an impairment charge.
As of December 31, 2021, there are no commitments to acquire addional intangible assets, except as set forth in note
29. No intangible assets are pledged as security for liabilies nor are there any intangible assets whose tle is restricted.
(In thousands of $)
Acquired
In-Process R&D
Soware &
databases
Other
Intangibles
Total
Cost
On January 1, 2019
— 182 — 182
Addions 45,000 293 — 45,293
Translaon dierences (198) (2) — (200)
On December 31, 2019 44,802 473
—
45,275Addions 16,182 2,814 98,000 116,996
Translaon dierences 4,196 256 1,058 5,510
On December 31, 2020 65,180 3,543 99,058 167,781
Addions 5,000 — — 5,000
Disposals — (190) — (190)
On December 31, 2021 70,180 3,353 99,058 172,591
Amorzaon and impairment
On January 1, 2019
—
(118) —
(118)Amorzaon — (43) — (43)
Translaon dierences — 4 — 4
On December 31, 2019
—
(158) —
(158)Amorzaon — (246) — (246)
Translaon dierences — (33) — (33)
On December 31, 2020
—
(437) —
(437)Amorzaon — (470) — (470)
On December 31, 2021
—
(907) —
(907)Carrying Amount
On December 31, 2019 44,802 315 — 45,117
On December 31, 2020 65,180 3,106 99,058 167,344
On December 31, 2021 70,180 2,446 99,058 171,684
6 Property, Plant and Equipment
(In thousands of $)
IT, oce
and lab
equipment
Right-of-use
assets
Buildings
Right-of-use
assets
Vehicles
Leasehold
improve
-
ments
Lease
equipment
1
Total
Cost
On January 1, 2019 3,105
— — — 290
3,395Adopon of IFRS 16 — 2,677 517 — — 3,194
Addions 856 5,097 588 905 32 7,478
Translaon dierences (55) (33) (7) 3 (5) (97)
On December 31, 2019 3,906 7,741 1,098 13,970
908
317Addions 733 3,335 1,074 432 — 5,574
Disposals (110) — — — — (110)
Translaon dierences 360 645 101 84 29 1,219
On December 31, 2020 4,889 11,721 2,273 1,424 346 20,653
Addions 3,163 4,923 802 543 — 9,430
Disposals (217) — — — — (217)
Currency translaon adjustment 104 (182) — 14 — (64)
On December 31, 2021 7,938 16,462 3,075 1,981 346 29,802
Depreciaon and impairment
On January 1, 2019 (2,439) (2,452)
— — —
(13)Depreciaon (515) (1,472) (261) (103) (31) (2,382)
Translaon dierences 45 (5) (1) — — 39
On December 31, 2019 (2,909) (1,477) (262) (103) (44) (4,795)
Depreciaon (535) (2,262) (441) (401) (32) (3,671)
Disposals 103 — — — — 103
Translaon dierences (301) (305) (57) (39) (6) (708)
On December 31, 2020 (3,642) (4,044) (760) (543) (82) (9,071)
Depreciaon (1,118) (2,714) (651) (539) (34) (5,055)
Disposals 158 — — — — 158
Currency translaon adjustment 37 (15) — (11) — 10
On December 31, 2021 (4,565) (6,774) (1,411) (1,093) (116) (13,958)
Carrying Amount
On December 31, 2019 997 6,264 836 805 273 9,175
On December 31, 2020 1,247 7,677 1,513 881 264 11,582
On December 31, 2021 3,373 9,688 1,664 888 230 15,844
1.
The Company has elected not to reassess whether a contract is, or contains, a lease at the date of inial applicaon. Instead, for contracts entered into
before the transion date, the Company relied on its assessment made applying IAS 17 and IFRIC 4 Determining whether an Arrangement contains a Lease.
There are no commitments to acquire property, plant and equipment. Furthermore, no items of property, plant and
equipment are pledged. See note 22 for informaon for leases where the Company is a lessee.
PART VII
270 | Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements | 271
7 Other Non-Current Assets
Other non-current assets consisted of non-current restricted cash and nancial assets held at fair value through prot or
loss or through OCI.
Non-current restricted cash on December 31, 2021 was mainly composed of deposit guarantees paid under the lease agree
-
ments for the laboratory and oces of the Company.
Non-current nancial assets held at fair value through prot or loss is comprised of the prot share in AgomAb Therapeucs
NV. In March 2019, the Company entered into a license agreement with AgomAb Therapeucs NV for the use of HGF-mi
-
mec SIMPLE Anbodies™, developed under the Company’s Immunology Innovave Program. In exchange for granng this
license, the Company received a prot share in AgomAb Therapeucs NV.
In March 2021, AgomAb Therapeucs NV secured $74 million in Series B nancing by issuing 286,705 of Preferred B Shares.
The Company used the post-money valuaon of Series B nancing round and the number of outstanding shares in deter
-
mining the fair value of the prot-sharing instrument, which results in a change in fair value of non-current nancial assets
of $11.2 million recorded through prot or loss.
Fair value changes on non-current nancial assets with fair value through prot or loss are recognized in the consolidated
statements of prot or loss in line “Other operang income”.
As part of the license agreement for the development and commercializaon for efgargimod in Greater China (see note 16
for further informaon), the Company obtained, amongst others, 568,182 newly issued Zai Lab shares calculated at a price
of $132 per share. The fair value of the equity instrument at reporng date is determined by reference to the closing price
of such securies at each reporng date (classied as level 1 in the fair value hierarchy), resulng in a change in fair value.
The Company made the irrevocable elecon to recognize subsequent changes in fair value through OCI in line “Fair value
gain/(loss) on investments in equity instruments designated as at FVTOCI”.
The table below illustrates these non-current nancials assets at fair value through prot or loss or OCI as of December 31,
2021, 2020 and 2019.
(In thousands of $)
At December
31, 2021
At December
31, 2020
At December
31, 2019
Restricted Cash - non-current 1,707 1,509 708
Non-current nancial assets held at fair value through prot or loss 17,459 6,307 2,916
Non-current nancial assets held at fair value through OCI 35,710 — —
Total other non-current assets 54,876 7,816 3,624
(In thousands of $)
At December
31, 2021
At December
31, 2020
At December
31, 2019
Cost at January 1
1,659 1,659
—Addions of the year 75,000 — 1,659
Cost at December 31 76,659 1,659 1,659
Fair value adjustments at January 1
4,648 1,257
—Fair value adjustment of the year through prot or loss 11,152 2,951 1,214
Fair value adjustment of the year through OCI (39,290) — —
Translaon dierence — 440 43
Fair value adjustment at December 31 (23,490) 4,648 1,257
Net book value at December 31 53,169 6,307 2,916
8 Deferred Taxes
The amount of deferred tax assets and liability by type of temporary dierence can be detailed as follows:
The change in net deferred taxes recorded in the consolidated statements of nancial posion can be detailed as follows:
At December 31, 2021
(In thousands of $) Assets Liabilies
Net
Deferred tax assets / (liabilies)
Accruals and allowances
2,858
— 2,858
Income tax benet from excess tax deducons related
to share-based payments
26,026 — 26,026
Prot in inventory 3,305 — 3,305
Property, plant and equipment 532 (740) (208)
Intangible assets — (2,714) (2,714)
Non-current xed assets — (3,725) (3,725)
Other 210 — 210
Neng by taxable enty (740) 740 —
Net deferred tax assets / (liabilies) 32,191 (6,438) 25,753
At December 31, 2020
(In thousands of $) Assets Liabilies
Net
Deferred tax assets / (liabilies)
Accruals and allowances
2,147
— 2,147
Income tax benet from excess tax deducons related to
share-based payments
13,362 — 13,362
Prot in inventory — — —
Property, plant and equipment — (167) (167)
Intangible assets — (1,792) (1,792)
Non-current xed assets — — —
Other — —
Neng by taxable enty (471) 471 —
Net deferred tax assets / (liabilies) 15,038 (1,487) 13,551
(IN THOUSANDS OF $)
Deferred tax
assets
Deferred tax
liabilies
Balance at January 1, 2021 15,038 (1,487)
Recognized in prot or loss 11,385 (5,082)
Recognized in equity 5,494 —
Eects of change in foreign exchange rate 274 131
Balance at December 31, 2021 32,191 (6,438)
(IN THOUSANDS OF $)
Deferred tax
assets
Deferred tax
liabilies
Balance at January 1, 2020
— —
Recognized in prot or loss 8,351 (1,384)
Recognized in equity 6,225 —
Eects of change in foreign exchange rate 462 (103)
Balance at December 31, 2020 15,038 (1,487)
PART VII
272 | Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements | 273
10 Trade and Other Receivables
The trade and other receivables are composed of receivables which are detailed below:
11 Financial Assets — Current
These current nancial assets relate to term accounts with an inial maturity longer than 3 months but less than 12 months
and money market funds that do not qualify as cash equivalents.
12 Cash and Cash Equivalents
The carrying amounts of trade and other receivables approximate their respecve fair values. On December 31, 2021, we
did not have any provision for expected credit losses.
Please also refer to note 26 for more informaon on the nancial risk management.
On December 31, 2021, the current nancial assets included €60.7 million held in EUR, which could generate a foreign cur
-
rency exchange gain or loss in our nancial results in accordance with the uctuaons of the USD/EUR exchange rate as the
Company’s funconal currency is USD.
Please also refer to note 26 for more informaon on the nancial risk management.
(In thousands of $)
At December
31, 2021
At December
31, 2020
At December
31, 2019
Trade receivable 28,058 287 25,367
Interest receivable 1,325 993 2,338
Other receivable 8,838 5,698 3,880
Total trade and other receivables 38,221 6,978 31,585
(In thousands of $)
At December
31, 2021
At December
31, 2020
At December
31, 2019
Money market funds 73,052 130,290 804,099
Term accounts 929,000 649,359 324,400
Total current nancial assets 1,002,052 779,649 1,128,499
(In thousands of $)
At December
31, 2021
At December
31, 2020
At December
31, 2019
Money market funds 997,092 858,291 —
Term accounts 95,090 61,356 255,631
Cash and bank balances 242,494 297,156 116,531
Total cash and cash equivalents 1,334,676
1,216,803 372,162
13 Share Capital and Share Premium
On December 31, 2021, the Company’s share capital was represented by 51,668,315 shares. All shares were issued, fully
paid up and of the same class. The table below summarizes our capital increases, as a result of oerings and the exercise of
stock opons under the Company’s Employee Stock Opon Plan.
Roll forward of number of shares outstanding:
Cash and cash equivalents may comprise of cash and bank balances, saving accounts, term accounts with an original matu
-
rity not exceeding 3 months and money market funds that are readily converble to cash and are subject to an insignicant
risk of changes in value.
Cash posions are invested with preferred nancial partners, which are mostly considered to be high quality nancial ins
-
tuons with sound credit rangs to reduce credit risk.
On December 31, 2021, the cash and cash equivalents included €462.0 million held in EUR, which could generate a foreign
currency exchange gain or loss in our nancial results in accordance with the uctuaons of the USD/EUR exchange rate as
the Company’s funconal currency is USD.
Please also refer to note 26 for more informaon on the nancial risk management.
Number of shares outstanding on January 1, 2019 35,975,312
Exercise of stock opons 419,317
Share subscripon from Johnson & Johnson Innovaon Inc. 1,766,899
Global public oering on Euronext and Nasdaq on November 7, 2019 4,000,000
Over-allotment opon exercised by underwriters on November 8, 2019 600,000
Number of shares outstanding on December 31, 2019 42,761,528
Exercise of stock opons 602,463
Global public oering in Euronext and Nasdaq on May 28, 2020 3,658,515
Over-allotment opon exercised by underwriters on May 29, 2020 548,777
Number of shares outstanding on December 31, 2020 47,571,283
Exercise of stock opons 503,282
Global public oering in Euronext and Nasdaq on February 2, 2021 3,125,000
Over-allotment opon exercised by underwriters on February 4, 2021 468,750
Number of shares outstanding on December 31, 2021 51,668,315
PART VII
9 Inventories
On December 31, 2021, inventories amounted to $109.1 million related to efgargimod. Of the total inventory, $48.8 million
relates to inventory which is currently awaing facility approval. As of December 31, 2021, no inventory write-downs were
recorded.
Included in inventory are products which could, besides commercial acvies, be used for in-house preclinical and clinical
programs, non-reimbursed pre-approval programs and clinical programs carried out by Zai Lab.
(In thousands of $)
At December
31, 2021
At December
31, 2020
At December
31, 2019
Raw materials and consumables 70,134 18,608 —
Inventories in process 37,705 6,587 —
Finished goods 1,237 — —
Total inventories
109,076
25,195 —
274 | Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements | 275
On February 2, 2021, argenx SE oered 3,125,000 of its ordinary shares through a global oering which consisted of
1,608,000 ADSs in the U.S. at a price of $320.0 per ADS, before underwring discounts and commissions and oering ex
-
penses; and 1,517,000 ordinary shares in the European Economic Area at a price of €265.69 per share, before underwrit
-
ing discounts and commissions and oering expenses. On February 4, 2021, the underwriters of the oering exercised
their over-allotment opon to purchase 468,750 addional ADSs in full. As a result, argenx SE received $1,146.7 million
in gross proceeds from this oering, decreased by $56.6 million of underwriter discounts and commissions, and oering
expenses, of which $56.0 million has been deducted from equity. The total net cash proceeds from the oering amount
-
ed to $1,090.1 million.
On May 11, 2021 at the annual general meeng, the shareholders of the Company approved the authorizaon to the
Board to issue a maximum of 10% of the then-outstanding share capital for a period of 18 months.
On December 31, 2021, an amount of €410,857.7, represented by 4,108,577 shares, sll remained available under the
authorized capital.
14 Share-based Payments
Stock Opon Plans
The Company has a stock opons scheme for the employees of the Company and its subsidiaries. In accordance with the
terms of the plan, as approved by shareholders, employees may be granted stock opons to purchase ordinary shares at an
exercise price as menoned below per ordinary share.
The stock opons are granted to employees, consultants or directors of the Company and its subsidiaries. The stock opons
have been granted free of charge. Each employee’s stock opon converts into one ordinary share of the Company upon ex
-
ercise. The stock opons carry neither rights to dividends nor vong rights. Stock opons may be exercised at any me from
the date of vesng to the date of their expiry. As of January 1, 2021, the Company decided to change the vesng period of
its sign-on stock opons from 4 years to 3 years to make the vesng consistent for all the opons granted.
The stock opons granted (regular and sign-on) vest, in principle, as follows:
•
1/3rd of the total stock opons granted will vest on the rst anniversary of the granng of the stock opons, and
•
1/36th of the total grant on the rst day of each month following the rst anniversary of the date of grant of the stock
opons.
Upon leave of the employee, consultant or director, stock opons must be exercised before the later of (i) 90 days aer the
last working day at argenx, or (ii) March 31 of the 4th year following the date of grant of those stock opons, and in any case
no later than the expiraon date of the opon.
In order to prenance the taxes that are paid upon the grant of stock opons, Belgian employees have the ability, in
exchange for the taxes due upon the grant of the stock opons, to transfer the economic benets related to part of those
stock opons to a third party. As of December 31, 2021, the economic benets of 190,560 stock opons, for which acceler
-
ated vesng applies, were transferred to a third party.
No other condions are aached to the stock opons.
The following share-based payment arrangements were in existence during the current and prior years and which are exer
-
cisable at the end of each period presented:
Expiry date
Exercise price
per stock
opons (in $)
(*)
Outstanding
stock opons on
December 31, 2021
Outstanding
stock opons on
December 31, 2020
Outstanding
stock opons on
December 31, 2019
2020 4.47 — — 7,210
2022 2.76 125,339 — —
2023 2.76 — 165,693 211,769
2024 2.76 94,088 100,086 102,696
2024 4.47 6,113 6,238 6,238
2024 8.12 276,500 294,167 335,067
2025 12.96 4,500 21,500 39,000
2025 11.71 — 950 3,000
2025 10.73 105,857 114,232 185,832
2026 12.89 41,000 45,000 45,000
2026 12.99 102,840 127,252 219,791
2026 16.00 117,581 176,426 258,746
2027 20.85 53,143 102,479 108,613
2027 23.98 361,350 460,701 565,798
2023 91.54 85,080 85,077 94,100
2028 91.54 39,515 49,532 73,100
2023 97.77 321,473 325,661 366,260
2028 97.77 350,631 381,317 402,714
2024 128.54 111,174 111,174 111,690
2029 128.54 146,765 163,410 299,560
2024 153.75 203,658 195,452 204,430
2029 153.75 611,122 692,914 717,455
2025 135.38 16,712 19,000 —
2030 135.38 102,558 123,700 —
2025 222.16 129,711 131,770 —
2030 222.16 282,475 325,150 —
2025 226.77 32,100 32,100 —
2030 226.77 136,601 175,200 —
2030 280.43 692,214 728,517 —
2025 280.43 203,214 211,045 —
2026 265.48 24,366 — —
2026 288.93 61,505 — —
2026 293.91 48,138 — —
2031 265.48 42,282 — —
2031 288.93 207,464 — —
2031 293.91 92,456 — —
2026/2031
(2)
350.20 389,588 — —
5,619,113 5,365,743 4,358,069
(1) Amounts have been converted to USD at the closing rate as of December 31, 2021.
(2) As of December 2021, the Company granted opons for which the beneciaries had a 60-day period to choose between a contractual term of ve or ten
years
PART VII
276 | Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements | 277
The weighted average share price at the date of exercise of opons exercised during the year ended December 31, 2021 was
$305.9, compared to $254.54 during the year ended December 31, 2020 and $124.69 during the year ended December 31,
2019. The weighted average remaining contractual life of the stock opons outstanding amounted to 6.3 years on December
31, 2021 compared to 7.08 years on December 31, 2020 and 7.27 years on December 31, 2019. The table below shows the
weighted average remaining contractual life for each range of exercise price:
The fair market value of the stock opons has been determined based on the Black and Scholes model using the following
unobservable assumpons:
•
The expected volality, determined on the basis of the implied volality of the share price over the expected life of the
opon.
•
The expected opon life, calculated as the esmated duraon unl exercise, taking into account the specic features of
the plans.
Below is an overview of the parameters used in relaon to the determinaon of the fair value of the grants during 2021:
Exercise price (in $)
Outstanding on
December 31, 2021
Weighted average remaining
contractual life (in years)
2.76 - 4.47 225,540 1.50
8.12 - 10.73 382,357 3.24
11.71 - 16.00 265,921 4.64
20.85 - 23.98 414,493 5.90
91.54 - 97.77 796,699 4.35
128.54 - 153.75 1,191,989 6.50
222.16 - 280.43 1,542,963 7.56
288.93 - 350.20 799,151 9.10
Stock opons granted in April 2021 July 2021 October 2021 December 2021
(1)
Number of opons granted 67,833 280,339 144,824 389,588
Average Fair value of opons (in $)
(*)
98.96 - 154.88 131.65 - 159.13 101.53 - 131.80 145.35 - 149.09
Share price (in $)
(*)
248.9 - 283.67 300.78 - 340.95 286.52 - 304.5 351.73
Exercise price (in $)
(*)
275.33 303.16 301.02 349.92
Expected volality 54.24 - 60.08 % 45.58 - 47.96 % 46.01 - 48.46 % 43.57 - 43.58 %
Average Expected opon life (in years) 4 - 6.50 4 - 6.50 4 - 6.50 6.15 - 6.50
(1)
Risk-free interest rate (0.41) - (0.08) % (0.41) - (0.17) (0.18) - (0.05) % 0.03 - 0.05 %
Expected dividends — — — —
Stock opons granted in April 2020 Juny 2020 October 2020 December 2020
Number of opons granted 142,700 550,090 196,500 908,362
Average Fair value of opons (in $)
(*)
76.46 - 148.03 83.46 - 129.64 91.10 - 156.68 101.23 - 229.20
Share price (in $)
(*)
155.23 - 252.29 224.80 - 281.25 256.46 - 293.52 273.15 - 383.10
Exercise price (in $)
(*)
146.68 240.70 245.69 303,83
Expected volality 44.44 - 64.77 % 43.46 - 52.19 % 44.17 - 52.71 % 46.80 - 59.94 %
Average Expected opon life (in years) 4 - 6.68 4 - 6.68 4 - 6.68 4 - 6.68
Risk-free interest rate (0.32) - (0.18) % (0.43) - (0.28) % (0.51) - (0.34) % (0.51) - (0.28) %
Expected dividends — — — —
2021 2020 2019
Number
of stock
opons
Weighted
average
exercise
price
(*)
Number
of stock
opons
Weighted
average
exercise
price
(*)
Number
of stock
opons
Weighted
average
exercise
price
(*)
Outstanding at January 1
5,365,743 142.87 4,358,069 78.23 3,536,651 37.54
Granted 882,584 314.99 1,797,652 266.71 1,365,172 144.38
Exercised (503,282) 64.72 (602,463) 38.86 (419,317) 12.75
Forfeited (125,932) 234.98 (187,515) 170.98 (124,437) 99.89
Outstanding at December 31 5,619,113 164.33 5,365,743 142.87 4,358,069 71.62
Exercisable at December 31 3,613,371 106.53 2,833,680 65.24 2,203,476 25.38
* amounts have been converted to USD at the closing rate of the respecve period.
Below is an overview of the parameters used in relaon to the determinaon of the fair value of grants during 2020:
Below is an overview of the parameter used in relaon to the determinaon of the fair value of grants during 2019:
The total share-based payment expense recognized in the consolidated statements of comprehensive income totaled $179.4
million for the year ended December 31, 2021, compared to $96.9 million for the year ended December 31, 2020 and $44.2
million for the year ended December 31, 2019.
Stock opons granted in June 2019 November 2019 December 2019
Number of opons granted 423,487 19,800 921,885
Average Fair value of opons (in $)
(*)
71.28 64.81 46.51 - 74.58
Share price (in $)
(*)
138.40 142.00 146.15-169.30
Exercise price (in $)
(*)
127.49 127.49 152.50
Expected volality 45.25 % 44.14 % 43.80 - 44.11 %
Average expected opon life (in years) 8.59 6.50 4 - 6.5
Risk-free interest rate 0.07 % (0.05) % (0.57) - (0.24) %
Expected dividends — — —
PART VII
(1) In December 2021, the Company granted a total of 389,588 stock opons. The beneciary can choose between a contractual term of ve or ten years.
The expected opon life ranges between 6.15 and 6.50 years. This esmate will be reassessed once the acceptance period of 60 days has passed and the
beneciaries will have made a choice between a contractual term of ve or ten years. The total fair value of the grant would range from $45.0 million
(100% of the stock opons with a contractual term of ve years) to $57.1 million (100% of the stock opons with a contractual term of ten years ).
(*) amounts have been converted to USD at the applicable rate prevailing at the grant date.
(*) amounts have been converted to USD at the closing rate of the respecve period.
(*) amounts have been converted to USD at the closing rate of the respecve period.
15 Trade and Other Payables
(In thousands of $)
At December
31, 2021
At December
31, 2020
At December
31, 2019
Trade payables 208,850 206,325 65,639
Short-term employee benets 83,737 68,867 30,188
Other 828 — —
Total trade and other payables
293,415 275,192 95,827
278 | Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements | 279
The table below summarizes the changes in deferred revenue – current and deferred revenue – non-current for the year
ended December 31, 2021, 2020 and 2019.
For the years ended December 31, 2021, 2020 and 2019, the majority of the revenue was generated under the agreements
with Zai Lab, Janssen and AbbVie, each as described below.
Trade payables correspond primarily to clinical and manufacturing acvies and include accrued expenses related to these
acvies.
As of December 31, 2021 and December 31, 2020, the trade payables include accruals amounng to $163.7 million and
$64.5 million, respecvely, related to accruals from clinical manufacturing organizaons for the manufacturing of drug prod
-
ucts and from clinical research organisaons.
Short-term employee benets include payables and accruals for salaries and bonuses to be paid to the employees of the
Company.
16 Revenue
The following table summarizes details of revenues for the year ended December 31, 2021, 2020 and 2019 by collaboraon
agreement and by category of revenue: upfront payments, milestone payments and research and development service fees.
(In thousands of $)
Year Ended
December
31, 2021
Year Ended
December
31, 2020
Year Ended
December
31, 2019
Zai Lab 151,903 — —
Janssen 292,279 33,759 22,386
AbbVie 121 565 855
Agomab — — 1,684
Other — 38 50
Upfront payments
444,303 34,362 24,975
Zai Lab 25,634 — —
Janssen 22,865 2,641 1,738
AbbVie 102 762 30,077
Other 1,214 19 25
Milestone payments
49,815 3,422 31,840
Janssen 2,028 3,175 21,236
Other 298 284 411
Research and development service fees 2,326 3,459 21,647
Zai Lab 833 — —
Other revenues —
833
—Total revenue
497,277 41,243 78,462
(In thousands of $) Janssen AbbVie Other
Total
On January 1, 2019 133 2,475
—
2,342Received
Upfront 328,327 — — 328,327
Milestone 25,000 30,000 — 55,000
Revenue recognion
Upfront (22,386) (855) (50) (23,291)
Milestone (1,738) (30,077) (25) (31,840)
Translaon dierence (4,575) 107 (2) (4,470)
On December 31, 2019 324,629 1,517 56 326,202
Received
Milestone — — — —
Revenue recognion
Upfront (33,759) (565) (38) (34,362)
Milestone (2,641) (762) (19) (3,422)
Translaon dierence 26,915 33 1 26,949
On December 31, 2020 315,144 223
—
315,367Received
Upfront — — — —
Milestone
Revenue recognion
Upfront (292,279) (121) — (292,400)
Milestone (22,865) (102) — (22,967)
On December 31, 2021
— — — —
Below are summaries of the key collaboraons.
Zai Lab
On January 6, 2021, argenx and Zai Lab announced the License agreement for the development and commercializaon of
efgargimod in Greater China, granng Zai Lab the exclusive rights to develop and commercialize efgargimod in Greater
China.
Under the terms of the agreement, the Company received $175 million in collaboraon payments, comprised of a $75
million upfront payment in the form of 568,182 newly issued Zai Lab shares calculated at a price of $132 per share, $75
million as guaranteed non-creditable, non-refundable payment, received in the rst quarter of 2021, and an addional
$25 million milestone payment upon regulatory approval of efgargimod by FDA in the U.S. The Company is also eligible
to receive ered royales (mid-teen to low twenes on a percentage basis) based on annual net sales of efgargimod in
Greater China.
With regard to this collaboraon with Zai Lab:
•
The Company concluded there are two performance obligaons under IFRS 15, being the transfer of a license and the at
arms-length supply of clinical and commercial product. The Company concluded that these performance obligaons are
disnct in the context of the contract.
PART VII
280 | Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements | 281
•
The Company concluded that the Subscripon Shares granted by Zai Lab, as included in the Share Issuance Agreement,
entered into on January 6, 2021, was obtained because of the exisng obligaons under the terms of the Collaboraon
and License Agreement, and is therefore to be considered to be part of the overall consideraon received.
•
The transacon price of these two agreements is currently composed of a xed part, that being an upfront payment of
$75 million in the form of newly issued Zai Lab shares, and a $75 million guaranteed, non-creditable, non-refundable
payment and $25 million milestone upon approval of efgargimod in the U.S. and the consideraon received in return for
the supply of clinical and commercial product. Milestone payments are only included in the transacon price to the extent
it is highly probable that a signicant reversal in the amount of cumulave revenue recognion will not occur when the
uncertainty associated with the conngent consideraon is subsequently resolved. We esmate the amount to be includ
-
ed in the transacon price upon achievement of the milestone event or the supply of clinical and commercial product.
Sales-based milestones and sales-based royales are a part of the Company’s arrangements but are not yet included in its
revenue.
•
The xed part of the transacon price, as well as the $25 million milestone upon approval of efgargimod in the U.S. has
been allocated to the transfer of a license performance obligaon.
•
The Company concludes that the license as of the eecve date of the contract has standalone value. As such, the Com
-
pany concluded that the promise in granng the license to Zai is to provide a right to use the enty’s intellectual property
as it exists at the point in me at which the license is granted and therefore, revenue accrued has been recognised at a
point in me. This conclusion was reached, taking into account following aspects:
•
there are no material restricons included in the contract which would prevent Zai Lab to direct the use of, and obtain
substanally all of the remaining benets, within Greater China and considering the sales-based royales which be
-
come due to the Company upon successful commercializaon.
•
the current phase of efgargimod, successfully completed the Phase III trials.
• Under the collaboraon agreement, the Company provides clinical and commercial supply to Zai Lab. Company con
-
cludes to recognize such sales as revenue given that the Company acts as principal in the transacon as the risk related to
inventory is born by the Company unl the inventory is transferred to Zai. The revenue related to clinical and commercial
supply is recorded under line item “Other revenues” within the revenue footnote.
AbbVie
In April 2016, the Company entered into a collaboraon agreement with AbbVie S.À.R.L. (AbbVie) to develop and commer
-
cialize ARGX-115 (ABBV-151). Under the terms of the collaboraon agreement, the Company was responsible for conducng
and funding all ARGX 115 (ABBV-151) research and development acvies up to compleon of IND enabling studies.
The Company granted AbbVie an exclusive opon, for a specied period following compleon of IND enabling studies, to
obtain a worldwide, exclusive license to the ARGX 115 (ABBV-151) program to develop and commercialize products. The
Company received an upfront, non-refundable, non-creditable payment of $40 million from AbbVie for the exclusive opon
to license ARGX 115 (ABBV-151). The Company achieved two preclinical milestones, each of which triggered a $10.0 million
payment.
In August 2018, AbbVie exercised its opon and has assumed certain development obligaons, being solely responsible for
all research, development and regulatory costs relang to ARGX-115 based products. In March 2019, the Company achieved
the rst development milestone upon iniaon of a rst-in-human clinical trial, triggering a $30.0 million payment. Subject
to the connuing progress of ARGX-115 (ABBV-151) by AbbVie, the Company is eligible to receive development, regulatory
and commercial milestone payments in aggregate amounts of up to $110 million, $190 million and $325 million, respec
-
vely, as well as ered royales on sales at percentages ranging from the mid single digits to the lower teens, subject to
customary reducons.
The Company has the right, on a product by product basis to co promote ARGX 115 (ABBV-151) based products in the
European Economic Area and Switzerland and to combine the product with the Company’s own future immuno oncology
programs. The co promoon eort would be governed by a co promoon agreement negoated in good faith by the pares.
AbbVie will fund further GARP related research by the Company for an inial period of two years. AbbVie will have the right
to license addional therapeuc programs emerging from this research, for which the Company could receive associated
milestone and royalty payments.
With regard to its collaboraon with AbbVie, the Company concluded as follows:
•
There is one single performance obligaon under IFRS 15, that being the transfer of a license combined with perfor
-
mance of research and development acvies. The Company concluded that the license is not disnct in the context of
the contract.
•
The transacon price of these two agreements is currently composed of a xed part, that being an upfront license fee,
and a variable part, being milestone payments and cost reimbursements of research and development acvies deliv
-
ered. Milestone payments are only included in the transacon price to the extent it is highly probable that a signicant
reversal in the amount of cumulave revenue recognion will not occur when the uncertainty associate with the variable
consideraon is subsequently resolved. We esmate the amount to be included in the transacon price upon achieve
-
ment of the milestone event. Sales-based milestones and sales-based royales are a part of the Company’s arrangements
but are not yet included in its revenues.
•
The transacon price has been allocated to the single performance obligaon and revenues have been recognized over
the esmated service period based on a paern that reects the transfer of the license and progress to complete sasfac
-
on of the research and development acvies. This is because we considered that there is a transformaonal relaon
-
ship between the license and the research and development acvies to be delivered.
•
The Company has chosen an input model to measure the sasfacon of the single performance obligaon that considers
percentage of costs incurred for these programs that are completed each period (percentage of compleon method).
•
Cost reimbursements received are recognized in revenues when costs are incurred and agreed by the pares, as the Com
-
pany is acng as a principal in the scope of its stake of the research and development acvies of its ongoing collabora
-
on and license agreements.
Janssen
On June 4, 2021, the Company received a terminaon nocaon from Cilag GmbH Internaonal, an aliate of Janssen,
which results in the terminaon of the Collaboraon Agreement to jointly develop and commercialize cusatuzumab. As a
result, the Company regains the worldwide rights to its an-CD70 anbody cusatuzumab.
Under the terms of the agreement, Janssen commied to an upfront payment of $500 million consisng of a license
payment of $300 million and a $200 million equity investment in the Company by subscribing to 1,766,899 new shares at a
price of €100.02 per share, including an issuance premium. In December 2019, the Company achieved the rst development
milestone, triggering a $25.0 million payment.
With regard to this collaboraon with Janssen, the Company concluded as follows:
•
There was one single performance obligaon under IFRS 15, that being the transfer of a license combined with perfor
-
mance of research and development acvies. The Company concluded that the license is not disnct in the context of
the contract.
•
The Company concluded that the share premium that Janssen paid above the closing price on the day of entering into
the investment agreement (being December 2, 2018) was paid because of the exisng obligaons to deliver development
services under the terms of the collaboraon agreement and was therefore considered to be part of the overall consider
-
aon received.
•
The transacon price of these two agreements composed of a xed part, that being an upfront license fee, and a variable
part, being milestone payments and cost reimbursements of research and development acvies delivered.
•
The transacon price was allocated to the single performance obligaon and revenue was previously recognized over the
esmated service period based on a paern that reects the transfer of the license and progress to complete sasfacon
of the research and development acvies.
Following the terminaon, the Company concluded that it has substanally sased the performance obligaon, and as a
consequence, recorded $315.1 million for the 12 months ending December 31, 2021.
PART VII
17 Other Operating Income
(In thousands of $)
Year Ended
December
31, 2021
Year Ended
December
31, 2020
Year Ended
December
31, 2019
Grants 4,398 1,365 2,563
Research and development incenves 13,970 10,257 5,373
Payroll tax rebates 12,621 9,095 6,413
Change in fair value on non-current nancial assets 11,152 2,951 1,214
Total other operang income 42,141 23,668 15,563
17.1 Grants
The grant income is related to grants received from the Flanders Innovaon and Entrepreneurship Agency. No condions
related to the above government grants were unfullled, nor were there any material conngencies related thereon at
the date of the approval of these consolidated nancial statements.
17.2 Research and development incentives
The Company has accounted for a tax receivable of $14.0 million in the year ended December 31, 2021, compared to
$10.3 and $5.4 million in the year ended December 31, 2020 and December 31, 2019, respecvely, following a research
and development tax incenve scheme in Belgium according to which the incenve will be refunded aer a ve year
period, if not oset against the current tax payable over the period.
17.3 Payroll tax rebates
The Company accounted for $12.6 million payroll tax rebates in the year ended December 31, 2021, compared to $9.1
and $6.4 million in the year ended December 31, 2020 and December 31, 2019, respecvely, as a reducon in withhold
-
ing income taxes for its highly qualied personnel employed in its research and development department.
282 | Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements | 283
18 Segment Reporting
The Company operates from the Netherlands, Belgium, the United States of America, Japan, Switzerland, Germany and
France. Revenues are generated by external customers with their main registered oce geographically located as shown in
the table below.
19 Research and Development Expenses
20 Selling, General and Administrative Expenses
The non-current assets of the Company, with the excepon of the deferred tax assets, are geographically located as shown
in the table below:
Revenue from external customers
(In thousands of $)
Year Ended
December
31, 2021
Year Ended
December
31, 2020
Year Ended
December
31, 2019
(*)
Denmark 1,389 342 488
Belgium — — 1,684
United States 317,396 40,901 76,290
China 178,370 — —
Other 123 — —
Total
497,277 41,243 78,462
Non-current assets
(In thousands of $)
At December
31, 2021
At December
31, 2020
At December
31, 2019
(*)
Netherlands — 1 1
Belgium 268,733 200,125 63,785
United States 3,138 4,751 3,435
Japan 3,232 2,491 319
Switzerland 8 — —
Total
275,111 207,368 67,540
(In thousands of $)
Year Ended
December
31, 2021
Year Ended
December
31, 2020
Year Ended
December
31, 2019
Personnel expenses 160,464 86,036 51,172
External research and development expenses 382,902 259,943 152,889
Materials and consumables 2,735 3,562 2,267
Depreciaon and amorzaon 3,742 2,835 1,840
Other expenses 30,677 18,509 12,603
Total research and development expenses 580,520 370,885 220,771
(In thousands of $)
Year Ended
December
31, 2021
Year Ended
December
31, 2020
Year Ended
December
31, 2019
Personnel expenses 164,646 108,507 44,774
Professional fees 102,674 48,681 18,181
Supervisory board 12,958 4,838 3,127
Other Expenses 27,366 9,617 6,064
Total Selling, general and administrave expenses 307,644 171,643 72,146
PART VII
*
In prior periods this has been presented based on the geographical locaon of the contracng enty.
*
In prior periods this has been presented based on the geographical locaon of the contracng enty.
21 Personnel Expenses
The personnel expenses menoned in note 19 and 20 above are as follows:
22 Leases
The statement of nancial posion shows the following amounts relang to leases:
The post employment benets relate to the pension plans the Company has in place for its employees.
The average number of full me equivalents (FTE) employees by department is presented below:
Addions to the right-of-use assets amounted to $5.7 million for the year ended December 31, 2021.
(In thousands of $)
Year Ended
December
31, 2021
Year Ended
December
31, 2020
Year Ended
December
31, 2019
Short-term employee benets—Salaries 135,676 75,437 36,747
Short-term employee benets—Social Security 12,785 9,087 3,996
Post-employment benets 2,864 1,242 837
Terminaon benets 818 1,005 722
Share-based payment 167,965 92,558 41,612
Employer social security contribuons stock opons 5,002 15,214 12,032
Total personnel expenses
325,110 194,543 95,946
Average Number of FTE
Year Ended
December
31, 2021
Year Ended
December
31, 2020
Year Ended
ecember
31, 2019
Research and development 349.7 213.0 121.6
Selling, general and administrave 264.4 119.5 56.3
614.1 332.5
177.9
(In thousands of $)
Year Ended
December
31, 2021
Year Ended
December
31, 2020
Year Ended
December
31, 2019
Right-of-use assets
Buildings 9,688 7,677 6,264
Vehicles 1,664 1,513 836
Equipment 230 264 273
11,583 9,454 7,373
Lease liabilies
Current 3,509 3,476 2,218
Non-current 7,956 6,181 5,101
11,465 9,657 7,319
284 | Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements | 285
The table below shows a maturity analysis of the lease liabilies as on December 31, 2021:
The consolidated statements of prot or loss and the consolidated statements of other comprehensive income shows the
following amounts relang to leases:
The total cash oulow for leases in 2021 and 2020 was $4.5 million and $3.0 million respecvely.
The Company did not enter into any lease agreement with variable lease payments or residual value guarantees. The
Company has leases that include extension opons. These opons provide exibility in managing the leased assets and align
with the Company’s business needs. The Company exercises judgement in deciding whether it is reasonably certain that the
extension opons will be exercised.
(In thousands of $)
Year Ended
December
31, 2021
Year Ended
December
31, 2020
Year Ended
December
31, 2019
Depreciaon charges
Buildings 2,714 2,262 1,472
Vehicles 651 441 261
Equipment 34 32 31
3,399 2,735 1,764
Interest expense (included in nance cost) 412 201 117
Expense relang to short-term leases 212 264 137
Expense relang to leases of low-value assets that are
not shown above as short-term leases
7 6 6
(In thousands of $)
Less than
1 year 1-3 years 3-5 years
More than
5 years
Total
contractual
cash ows
Carrying
amount
Lease liabilies 3,509 6,331 2,164 — 12,004 11,465
23 Financial Result and Exchange Gains/(losses)
(In thousands of $)
Year Ended
December
31, 2021
Year Ended
December
31, 2020
Year Ended
December
31, 2019
Interest income 3,489 5,119 8,805
Net gain on current nancial assets held at fair value
through prot or loss and cash equivalents
144 1,340 7,317
Financial income 3,633 6,459 16,122
Net loss on current nancial assets held at fair value
through prot or loss and cash equivalents
(3,482) (7,559) —
Other nancial expense (1,096) (401) (139)
Financial expense (4,578) (7,960) (139)
Realized exchange gains/(losses) 15 (443) (385)
Unrealized exchange gains/(losses) (50,068) (125,791) 7,375
Exchange gains/(losses) (50,053) (126,234) 6,990
PART VII
The exchange losses of $50.1 million for the year ended December 31, 2021 were primarily aributable to unrealized
exchange rate losses on our cash and cash equivalents and current nancial assets posion in EUR due to the unfavorable
uctuaon of the EUR exchange rate over the period.
The tax rate used for the 2021, 2020 and 2019 reconciliaons above is the corporate income tax rate of 25% payable by
corporate enes in the Netherlands.
The unrecognized deferred tax asset on unused tax losses amounts to $203.8 million on December 31, 2021, compared to
$174.2 million on December 31, 2020. Deferred tax have been measured using the eecve rate that will apply in Belgium
and the Netherlands (25%). The Company has unused tax losses carried forward for an amount of $815.3 million on Decem
-
ber 31, 2021, compared to $696.7 million on December 31, 2020. This, combined with other temporary dierences, resulted
in a net deferred tax asset posion. Due to the uncertainty surrounding the Company’s ability to realize taxable prots in the
future, the Company did not recognize any deferred tax assets, with the excepon of those further detailed in note 8.
As a company acve in research and development in Belgium, we expect to benet from the innovaon income deducon,
or IID, in Belgium. The innovaon income deducon regime allows net prots aributable to revenue from among oth
-
ers patented products to be taxed at a lower eecve tax rate than other revenues. At the end of 2021 and 2020, we had
$161.5 million and $52.1 million of carry-forward IID in Belgium.
Income taxes were directly recognized in the income statement can be detailed as follows:
24 Income Tax Expense
The income tax expense for the year can be reconciled to the accounng loss as follows:
(In thousands of $)
Year Ended
December
31, 2021
Year Ended
December
31, 2020
Year Ended
December
31, 2019
Loss before taxes 399,743 605,352 175,919
Income tax calculated at 25% 99,936 151,338 43,980
Eect of expenses and gains that are not deducble
in determining taxable results
(34,366) (12,813) (8,625)
Eect of stock issue expenses that are not deducble
in determining taxable results
14,119 14,139 6,363
Eect of concessions 13,413 7,900 635
Eect of tax losses carried forward not recognized (44,232) (116,711) (12,952)
Eect of dierent tax rates in jurisdicons in which the company operates (2,084) (195) (58)
Deferred tax asset other than loss carryforwards not recognized (50,389) (45,601) (30,336)
Withholding tax paid (5,076) — —
(Underprovided)/overprovided in prior years 398 (1,014) (4,310)
Other (241) (146) 15
Income tax expense recognized in the consolidated
statements of prot or loss
(8,522) (3,103) (5,289)
(In thousands of $)
Year Ended
December
31, 2021
Year Ended
December
31, 2020
Year Ended
December
31, 2019
Current year 15,224 7,847 5,289
Income tax prior years (398) 1,732 —
Current tax expense
14,826 9,579 5,289
Originang and reversal of temporary dierences (6,304) (6,476) —
Deferred tax expense / (income) (6,304) (6,476)
—
Total tax expense
8,522 3,103 5,289
286 | Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements | 287
25 Loss per Share
26 Financial Risk Management
The nancial risks are managed centrally. The Company coordinates the access to naonal and internaonal nancial
markets and considers and manages connuously the nancial risks concerning the Company’s acvies. These relate to
the nancial markets risk, credit risk, liquidity risk and currency risk. There are no other important risks, such as interest
rate risk on borrowings, as the Company has no nancial debt. The Company does not buy or trade nancial instruments for
speculave purposes.
Categories of nancial assets and liabilies:
(In thousands of $)
Year Ended
December
31, 2021
Year Ended
December
31, 2020
Year Ended
December
31, 2019
Loss of the year (408,265) (608,455) (181,208)
Weighted average number of shares outstanding 51,075,827 45,410,442 38,619,121
Basic and diluted loss per share (in $) (7.99) (13.40) (4.69)
Earnings/losses per ordinary share are calculated by dividing the loss for the period by the weighted average number of
ordinary shares during the year.
As the Company reported a net loss in 2021, 2020 and 2019, stock opons have an an diluve eect rather than a diluve
eect. As such, there is no dierence between basic and diluted earnings/losses per ordinary share.
Measurement
category Carrying amount
(In thousands of $)
At December
31, 2021
At December
31, 2020
(*)
At December
31, 2019
(*)
Financial assets — non-current FVTPL 17,459 6,307 2,916
Financial assets — non-current FVTOCI 35,710 — —
Research and development incenve receivables —
non-current
Amorsed cost 32,707 20,626 9,624
Restricted cash — non-current Amorsed cost 1,707 1,509 708
Trade and other receivables Amorsed cost 38,221 6,978 31,585
Financial assets—current FVTPL 73,052 130,290 804,099
Financial assets—current Amorsed cost 929,000 649,359 324,400
Research and development incenve receivables —
current
Amorsed cost — 463 293
Cash and bank balances Amorsed cost 242,494 297,156 116,531
Cash equivalents FVTPL 997,092 858,291 —
Cash equivalents Amorsed cost 95,090 61,356 255,631
Trade and other payables Amorsed cost 293,415 275,192 95,827
*
The historical consolidated nancial informaon for 2020 and 2019 presented in this disclosure note has been adjusted to present the breakdown of current
nancial assets that are measured at FVTPL and amorzed cost.
PART VII
*
The historical consolidated nancial informaon for 2020 and 2019 presented in this disclosure note has been adjusted to present the breakdown
of current nancial assets that are measured at FVTPL and amorzed cost.
Financial assets held at fair value through prot or loss or OCI
Financial assets held at fair value through prot or loss or OCI consisted of equity instruments of listed and non-listed com
-
panies and money market funds.
The Company has no restricons on the sale of these equity instruments and the assets are not pledged under any of its
liabilies. These instruments are classied as nancial assets held at fair value through prot or loss or OCI which qualify for:
•
Level 1 fair value measurement with respect to current nancial assets and cash equivalents based upon the closing price
(net asset value) of such securies at each reporng date.
•
Level 3 fair value measurement with respect to non-current nancial assets.
The market price of these nancial instruments might face uctuaons and might be aected by a variety of factors, such
as the global economic situaon. Current nancial assets and cash equivalents include collecve investment funds nomi
-
nated in € and $ of which the underlying investments include bonds and other internaonal debt securies. Based on the
weighted average maturity of the underlying instruments, amongst others, these investments are either classied as current
nancial assets or cash equivalents.
The maximum exposure to credit risk is the carrying amount at reporng date.
The Company carried the following assets at fair value on December 31, 2021, 2020 and 2019 respecvely:
At December 31, 2021
(In thousands of $) Level 1 Level 2 Level 3
Non-current nancial assets 35,710 — 17,459
Current nancial assets 73,052 — —
Cash Equivalents 997,092 — —
Assets carried at fair value 1,105,854
—
17,459At December 31, 2020
(*)
(In thousands of $)
Level 1 Level 2 Level 3
Non-current nancial assets — — 6,307
Current nancial assets 130,290 — —
Cash Equivalents 858,291 — —
Assets carried at fair value 988,581
—
6,307At December 31, 2019
(*)
(In thousands of $) Level 1 Level 2 Level 3
Non-current nancial assets — — 2,916
Current nancial assets 804,099 — —
Assets carried at fair value 804,099
—
2,916288 | Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements | 289
During the disclosed calendar year, no transfers occurred between the applicable categories.
Non-current nancial assets – Level 3
In March 2019, the Company entered into a license agreement with AgomAb Therapeucs NV for the use of HGF-mimet
-
ic SIMPLE Anbodies™, developed under the Company’s Immunology Innovave Program. In exchange for granng this
license, the Company received a prot share in AgomAb Therapeucs NV.
In March 2021, AgomAb Therapeucs NV secured $74 million in Series B nancing by issuing 286,705 of Preferred B Shares.
The Company used the post-money valuaon of Series B nancing round and the number of outstanding shares in deter
-
mining the fair value of the prot-sharing instrument, which results in a change in fair value of non-current nancial assets
of $11.2 million recorded through prot or loss. Since AgomAb Therapeucs NV is a private company, the valuaon of the
prot share is based on level 3 assumpons.
Non-current nancial assets – Level 1
As part of the license agreement for the development and commercializaon for efgargimod in Greater China (see note 16
for further informaon), the Company obtained, amongst others, 568,182 newly issued Zai Lab shares calculated at a price
of $132 per share. The fair value of the equity instrument at period-end is determined by reference to the closing price of
such securies at each reporng date (classied as level 1 in the fair value hierarchy), resulng in a change in fair value. The
Company made the irrevocable elecon to recognize subsequent changes in fair value through OCI.
Capital risk
The Company manages its capital to ensure that it will be able to connue as a going concern. The capital structure of the Com
-
pany consists of equity aributed to the holders of equity instruments of the Company, such as capital, reserves and accumu
-
lated losses as menoned in the consolidated statements of changes in equity. The Company makes the necessary adjustments
in the light of changes in the economic circumstances, risks associated to the dierent assets and the projected cash needs of
the current and projected research acvies. On December 31, 2021, cash and cash equivalents amounted to $1,334.7 million
and total capital amounted to $3,469 million. The current cash situaon and the ancipated cash generaon are the most
important parameters in assessing the capital structure. The Company’s objecve is to maintain the capital structure at a level
to be able to nance its acvies for at least twelve months. Cash income from exisng and new partnerships is taken into
account and, if needed and possible, the Company can issue new shares or enter into nancing agreements.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligaons resulng in nancial loss to the
Company. The Company has adopted a policy of only dealing with creditworthy counterpares and obtaining sucient col
-
lateral, where appropriate, as a means of migang the risk of nancial loss from defaults. Concentraons in credit risk are
determined based on an analysis of counterpares and their importance on the overall outstanding contractual obligaons
at year-end.
The Company has a limited number of collaboraon and license partners and therefore has a signicant concentraon of
credit risk. However, it has policies in place to ensure that credit exposure is kept to a minimum and signicant concentra
-
ons of credit exposure are only granted for short periods of me to high credit quality collaboraon partners.
The Company applied the IFRS 9 simplied approach to measuring expected credit losses which uses a lifeme expected
loss allowance for all receivables. To measure the expected credit losses, receivables have been grouped based on credit risk
characteriscs and the days past due. The provision for expected credit losses was not signicant given that there have been
no credit losses over the last three years and the high quality nature of our customers.
Cash and cash equivalents and current nancial assets are invested with several highly reputable banks and nancial ins
-
tuons. The Company holds its cash and cash equivalents mainly with dierent banks which are independently rated with
a minimum rang of ‘A-’. The Company also holds short term investment funds in the form of money market funds with a
recommended investment horizon of 6 months or shorter but with a low historical volality. These money market funds are
*
The historical consolidated nancial informaon for 2020 presented in this disclosure note has been adjusted to correct for the amounts of current nancial
assets that are measured at fair value.
*
The historical consolidated nancial informaon for 2019 presented in this disclosure note has been adjusted to correct for the amounts of current nancial
assets that are measured at fair value.
PART VII
highly liquid investments, can be readily converble into a known amount of cash. Since they are a basket of funds there is
no individual credit risk involved. The company has adopted a policy whereby money market funds must have an average
rang of “BBB-“ or higher.
Liquidity risk
The Company manages liquidity risk by maintaining adequate reserves, by connuously monitoring forecast and actual cash
ows, and by matching the maturity proles of nancial assets and liabilies.
The Company’s main sources of cash inows are obtained through capital increases and collaboraon agreements. This cash
is invested in savings accounts, term accounts and short term investment funds in the form of money market funds. These
money market funds represent the majority of the Company’s available sources of liquidity however since all of these are
immediately tradable and converble in cash they have a limited impact on the liquidity risk.
Interest rate risk
The only variable interest-bearing nancial instruments are cash and cash equivalents and current nancial investments.
Changes in interest rates may cause variaons in interest income and expense resulng from short-term interest-bearing
assts. Management does not expect the short-term interest rates to decrease signicantly in the immediate foreseeable
future, which limits the interest exposure on our cash and cash equivalents and current nancial assets.
For the year ended December 31, 2021, if applicable interest rates would increase/decrease by 25 basis points, this would
have a posive/negave impact of $0.9 million (compared to $1.7 million for the year ended December 31, 2020 and $2.2
million for the year ended December 31, 2019).
Foreign exchange risk
The Company undertakes transacons denominated in foreign currencies; consequently, exposures to exchange rate uctu
-
aons arise. The Company is mainly exposed to the Euro, Japanese yen, Brish pound and Swiss franc. To limit this risk, the
Company aempts to align incoming and outgoing cash ows in currencies other than USD.
The net exposure to exchange dierences of the monetary assets (being cash, cash equivalents and current nancial assets)
of the Company at the end of the reporng period are as follows:
On December 31, 2021, if the EUR/USD exchange rate would have increased/decreased by 10%, this would have had a neg
-
ave/posive impact of $53.81million, compared to $63.91 million and $52.6 million on December 31, 2020 and December
31, 2019, respecvely. On December 31, 2021, if the exchange rate for other currencies would have increased/decreased by
10%, this would have had no signicant impact.
(In thousands of $)
At December
31, 2021
At December
31, 2020
At December
31, 2019
EUR 591,887 703,016 578,483
JPY
6,316 264 856
GBP 1,237 48 4
CHF 727 2 1
27 Related Party Transactions
27.1 Relationship and Transactions with Subsidiaries
See note 31 for an overview of the consolidated companies of the group, which are all wholly-owned subsidiaries of argenx SE.
Balances and transacons between the Company and its subsidiaries, which are related pares of the Company, have
been eliminated on consolidaon and are not disclosed in this note.
290 | Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements | 291
27.2 Relationship and Transactions with Key Personnel
The Company’s key management personnel consists of the members of the management team and the members of the
board of directors.
Remuneraon of key management personnel
On December 31, 2021, the senior management consisted of 8 members: Chief Execuve Ocer, Chief Operang Ocer,
Chief Financial Ocer, Chief Scienc Ocer, General Counsel, Chief Medical Ocer, Vice President Corporate Develop
-
ment and Strategy and Global Head of Quality Assurance. They provide their services on a full-me basis.
On December 31, 2021, the board of directors consisted of 8 members: Peter Verhaeghe, Don deBethizy, Pamela M.
Klein, Werner Lanthaler, A.A. Rosenberg, James M. Daly, Yvonne Greenstreet and Tim Van Hauwermeiren.
Only the Chief Execuve Ocer is a member of both the senior management team and the board of directors. The Chief
Execuve Ocer does not receive any remuneraon for his board membership, as this is part of his total remuneraon
package in his capacity as member of the senior management team.
The remuneraon package of the members of key management personnel comprises:
(In thousands of $, except for
the number of stock opons & RSUs)
Year Ended
December
31, 2021
Year Ended
December
31, 2020
Year Ended
December
31, 2019
Remuneraon of key management personnel
Short-term benets for senior management members as a group
Gross salary 3,465 3,246 2,829
Variable pay 2,020 1,510 1,091
Employer social security 789 753 910
Other short term benets 274 156 137
Terminaon Benets 382 385 526
Post-employment benets for senior management members as a group
150 161 161
Cost of stock opons granted in the year for senior management members
as a group
15,060 42,824 24,457
Cost of restricted stock units granted in the year for senior management
members as a group
8,025 — —
Employer social security cost related to stock opons
4,172 11,206 10,255
Total benets for key management personnel 34,337 60,241 40,366
Numbers of stock opons granted in the year
Senior Management as a group 101,446 334,900 405,000
Numbers of restricted stock units granted in the year
Senior Management as a group 22,888 — —
Remuneraon of non-execuve directors
Board fees and other short-term benets for non-execuve directors
435 405 423
Cost of stock opons granted in the year for non-execuve directors
3,263 9,576 4,847
Cost of restricted stock units granted in the year for non-execuve directors
1,731 — —
Total benets for non-execuve board members 5,429 9,981 5,270
Numbers of stock opons granted in the year
Non-execuve directors 22,950 70,000 70,000
Numbers of restricted stock units granted in the year
Non-execuve directors 5,100 — —
PART VII
28 Contingencies
The Company is currently not facing any outstanding claims or ligaons that may have a signicant adverse impact on the
Company’s consolidated nancial posion.
29 Commitments
At balance sheet date, there were no commitments signed for the acquision of property, plant and equipment. In January
2021, the Company entered into a binding lease commitment related to the envisioned relocaon to a newly built oce in
Zwijnaarde, Belgium. Included in the binding lease commitment is a rent free period for 6 months following the compleon
of the building. The total future cash oulows related to this lease are as follows:
In February 2019, and as amended in September 2020, the Company entered into a global collaboraon and license agree
-
ment with Halozyme Therapeucs, Inc. Under the terms of the agreement, the Company will pay $12.5 million per target for
future target nominaons and potenal future payments of up to $160.0 million per selected target subject to achievement
of specied development, regulatory and sales-based milestones and up to $40.0 million subject to the achievement of
addional, specied sales-based milestones. This amount represents the maximum amount that would be paid if all mile
-
stones would be achieved but excludes variable royalty payments based on unit sales. In 2019, the Company exercised the
opon to nominate an addional target (triggering a $10.0 million development milestone payment) and iniated a Phase
1 clinical trial using Halozyme’s proprietary ENHANZE® drug delivery technology (triggering a $5.0 million development
milestone payment). In 2020, the Company iniated a Phase 3 clinical trial using Halozyme’s proprietary ENHANZE® drug
delivery technology (triggering a $15.0 million development milestone payment). In 2021, the Company iniated a Phase
1 clinical trial using Halozyme’s proprietary ENHANZE® drug delivery technology (triggering a $5.0 million development
milestone payment).
The Company’s manufacturing commitments with Lonza, its drug substance manufacturing contractor, relate to the ongoing
execuon of the biologic license applicaon (BLA) services for efgargimod and its manufacturing acvies related to the
potenal future commercialisaon. In December 2018, the Company signed its rst commercial supply agreement with
Lonza related to the reservaon of commercial drug substance supply capacity for efgargimod. In the aggregate, the Com
-
pany has outstanding commitments for efgargimod under the rst commercial supply agreement of $312.4 million.
(In thousands of $)
Less than
1 year 1-3 years 3-5 years
More than
5 years
Total
contractual
cash ows
Lease commitments not commenced — — 1,437 17,718 19,155
292 | Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements | 293
31 Overview of Consolidation Scope
The parent company argenx SE is domiciled in the Netherlands. The Company, argenx SE, has two subsidiaries, argenx BV
and argenx IIP BV, based in Belgium. argenx BV has ve subsidiary, argenx US, Inc., based in the United States of America,
argenx Japan KK, based in Japan, argenx Switzerland SA, based in Switzerland, argenx France SAS based in France and argenx
Germany GmbH based in Germany. Details of the Company’s consolidated enes at the end of the reporng period are as
follows:
30 Audit fees
The following auditors’ fees were expensed in the income statement:
Name Registraon number Country Parcipaon Main acvity
argenx SE
COC 24435214 The Netherlands 100.00 % Holding company
argenx BV 0818292196 Belgium 100.00 %
Biotechnical
research on drugs
and pharma
processes
argenx IIP BV 0751809485 Belgium 100.00 %
Biotechnical
research on drugs
and pharma
processes
argenx US, Inc. 36-4880497
USA
100.00 %Pharmaceucals
and pharmacy
supplies merchant
wholesalers
argenx Switzerland, SA CH-660.3.799.020-7 Switzerland 100.00 %
Pharmaceucals
and pharmacy
supplies merchant
wholesalers
argenx Japan KK 0104-01-145183 Japan 100.00 %
Pharmaceucals
and pharmacy
supplies merchant
wholesalers
argenx France SAS 90065093800013 France 100.00 %
Pharmaceucals
and pharmacy
supplies merchant
wholesalers
argenx Germany GmbH HRB 268437 Germany 100.00 %
Pharmaceucals
and pharmacy
supplies merchant
wholesalers
(In thousands of $)
Year Ended
December
31, 2021
Year Ended
December
31, 2020
Year Ended
December
31, 2019
Audit Fees
(1)
1,183 923 817
Audit-related Fees 267 188 178
Tax Fees
(2)
79 — —
All other Fees — — —
Total
1,529 1,111
995(1) Audit services performed by Deloie Accountants B.V. as the external auditor referred to in Secon 1 of the Dutch Accounng Firms Oversight Act (Wta)
as well as by the Deloie network.
(2) Tax and other services performed by the Deloie network.
Other
No loans, quasi-loans or other guarantees were given by the Company or any of its subsidiaries to members of the board
of directors or the execuve team. We have not entered into transacons with our key management personnel, other
than as described above with respect to remuneraon arrangements relang to the exercise of their mandates as mem
-
bers of the execuve team and the board of directors.
PART VII
32 Events After the Balance Sheet Date
No events have occurred after the Balance Sheet date that could have a material impact on the consolidated financial
statements.
294 | Notes to the Consolidated Financial Statements
8
PART VIII
Company
Financial
Statements
Contents
8.1 Signatures of Execuve and Non-execuve Directors 298
8.2 Company Balance Sheet on December 31, 2021 argenx SE
300
8.3
Company Prot or Loss Account for the Year ended
301
8.4 Notes to the Company Financial Statements of argenx SE 302
8.5 Other informaon 307
8.6 Independent Auditor’s Report 308
FOR ARGENX SE - FOR THE YEAR ENDED DECEMBER 31, 2021
PART VIII
Signatures of Executive and
Non-Executive Directors
In accordance with arcle 2:101 of the Dutch Civil Code, the annual accounts were signed by all execuve and non-execu
-
ve directors on March 18, 2022.
Company Financial Statements
for argenx SE
For argenx SE
For the year ended December 31, 2021
298 | Signatures of Executive and Non-Executive Directors
Company Financial Statements for argenx SE | 299
PART VIII
Company Balance Sheet on December 31,
2021 argenx SE
Company Profit or Loss Account for the
Year Ended December 31, 2021 argenx SE
300 | Company Balance Sheet on December 31, 2021 argenx SE
Company Profit or Loss Account for the Year Ended December 31, 2021 argenx SE | 301
(In thousands of $)
NOTE
Year ended
December
31, 2021
Year ended
December
31, 2020
(*)
Intercompany Recharges — —
Total operang income
— —
G&A Expenses (21,944) (12,738)
Total operang expenses (21,944) (12,738)
Operang result (21,944) (12,738)
Financial income and expense 8 (5,231) (1,626)
Share in result of subsidiaries 9 (381,493) (589,668)
Result before taxaon (408,668) (604,032)
Taxaon on result of ordinary acvies 404 (101)
Result aer taxaon (408,265) (604,134)
Assets
(In thousands of $)
NOTE
At December
31, 2021
At December
31, 2020
(*)
Non-current Assets
Financial Fixed Assets 2
Investments in Group Companies 2,412,741 1,536,080
Other nancial assets 1 1
Total Financial Fixed assets
2,412,742 1,536,081
Total Non-Current Assets
2,412,742 1,536,081
Current assets
Receivables 3 1,993 6,155
Financial assets — current 4 4,985 5,430
Cash in banks 5 142,853 117,995
Total Current Assets
149,831 129,579
Total Assets
2,562,573 1,665,661
Equity and liabilies
(In thousands of $)
NOTE
At December
31, 2021
At December
31, 2020
(*)
Equity 6
Share Capital 6,233 5,744
Share Premium 3,462,775 2,339,033
Accumulated losses (1,400,196) (991,931)
Reserve for Share-Based payments 356,875 177,509
Translaon reserves 134,041 134,041
Total Equity 2,559,728 1,664,396
Current liabilies
7
Accounts Payable 70 0
Intercompany payables 1,232 655
Taxes payable 95 0
Accrued expenses 620 610
Other payables 827 0
Total Liabilies 2,845 1,265
Total Equity & Liabilies 2,562,573 1,665,661
* The Company has adopted a change in its presentaon currency from EUR to USD at January 1, 2021, as described in note 1.3. Accordingly, the December
31, 2020 comparave statements and related notes have been re-presented retrospecvely based on the accounng policies as outlined in note 1.3.
* The Company has adopted a change in its presentaon currency from EUR to USD at January 1, 2021, as described in note 1.3. Accordingly, the December
31, 2020 comparave statements and related notes have been re-presented retrospecvely based on the accounng policies as outlined in note 1.3.
PART VIII
Notes to The Company Financial
Statements of argenx SE
1 Accounting Information and Policies
1.1 Basis of Preparation
The company nancial statements of argenx SE (hereaer: the company) have been prepared in accordance with Part
9, Book 2 of the Dutch Civil Code. In accordance with arcle 362 sub8, Book 2 of the Dutch Civil Code, the company’s
nancial statements are prepared based on the accounng principles of recognion, measurement and determinaon of
prot, as applied in the consolidated IFRS nancial statements.
1.2 Summary of Significant Accounting Policies
In case no other policies are menoned, refer to the accounng policies as described in the summary of signicant
accounng policies in the consolidated IFRS nancial statements. For an appropriate interpretaon, the company nancial
statements of argenx SE should be read in conjuncon with the consolidated IFRS nancial statements.
Parcipang interests in group companies
Parcipang interests in group companies are valued using the equity method, applying the IFRS accounng policies
endorsed by the European Union. Following the adopon of IFRS 9 by the group, and our interpretaon of the Dutch
Accounng Standard 100.107A, the company shall, upon idencaon of a credit loss on an intercompany loan and/
or receivable, eliminate the carrying amount of the intercompany loan and/or receivable for the value of the idened
credit loss.
Result of parcipang interests
The share in the result of parcipang interests consists of the share of the Company in the result of these parcipang
interests. In so far as gains or losses on transacons involving the transfer of assets and liabilies between the Company
and its parcipang interests or between parcipang interests themselves can be considered unrealized, they have not
been recognized.
All amounts are presented in thousands of USD, unless stated otherwise. The balance sheet and income statement
references have been included. These refer to the notes.
1.3 Change in Functional and Presentation Currency as of January 1, 2021
As of January 1, 2021, the Company changed its funconal and presentaon currency from EUR to USD. The change in
funconal currency was made to reect that USD has become the predominant currency in the Company, represenng a
signicant part of the Company’s cash ows and nancing. The change has been implemented with prospecve eect.
The change in presentaon currency, eecve January 1, 2021, from EUR to USD is retroacvely applied on comparave
gures according to IAS 8 and IAS 21, as if USD had always been the presentaon currency of the consolidated nancial
statements. The change was made to beer reects the economic footprint of the Company’s business going forward.
The Company believes that the presentaon currency change will give investors and other stakeholders a clearer under
-
standing of the Company’s performance over me.
Comparison gures in the balance Sheet, prot or loss, and all disclosures have been re-presented, unless otherwise
stated, using the procedures outlined below:
• Assets and liabilies are translated into USD at the closing rates applicable at the end of each reporng period.
• Income and expenses are translated at exchange rates at the dates of the respecve transacon or average rates
where these are a suitable proxy.
• Dierences resulng from the re-presentaon have been presented as translaon dierence, a component within
shareholders’ equity.
• Share capital, share premium, and other reserves are translated at historic rates prevailing at the date of transacon.
2. Financial Fixed Assets
The Company has two Belgian subsidiaries, argenx BV and argenx IIP BV, which carry out the research and development
acvies of the Group. Argenx IIP BV was incorporated through a paral demerger of argenx BV in 2020. Argenx BV has
ve subsidiaries, argenx US Inc. (United States), argenx Japan KK (Japan), argenx Switzerland SA (Switzerland), argenx
Germany GmbH and argenx France SAS. The nancial xed assets consist of the 100% parcipaons in argenx BV and,
argenx IIP BV, both registered at Industriepark 7, Zwijnaarde, Belgium.
The movement in nancial xed assets is as follows:
302 | Notes to The Company Financial Statements of argenx SE
Notes to The Company Financial Statements of argenx SE | 303
(In thousands of $)
At December
31, 2021
At December
31, 2020
Investments in Group Companies
Opening Balance 1,535,060 1,113,192
Share of loss of investments (437,968) (589,668)
Share-based payment expenses of investments 167,965 91,049
Translaon reserves — (37,064)
Capital increase argenx BV 1,146,687 896,195
Paral demerger argenx BV — (10,623)
Incorporaon argenx IIP BV — 10,623
Capital increase argenx IIP BV — 61,355
Closing balance 2,411,743 1,535,060
Receivable/(payable) on Group companies 999 1,020
Investments in Group companies 2,412,741 1,536,080
Other nancial assets
Opening Balance 1 1
Balance as at year-end
1 1
Total nancial xed assets 2,412,742 1,536,081
PART VIII
5 Cash and Cash Equivalents
6 Equity
(In thousands of $)
At December
31, 2021
At December
31, 2020
Term deposits 47,365 68,846
Current bank accounts 95,488 49,149
Total Cash in banks
142,853 117,995
For the details on Share Based Payments we refer to note 14 of the consolidated IFRS nancial statements.
The company holds no legal reserves as part of the equity.
7 Current Liabilities
8 Financial Result and Exchange Gains/(Losses)
(In thousands of $)
At December
31, 2021
At December
31, 2020
Accounts payable 70 —
Intercompany payables 1,232 655
Taxes payable 95 —
Accrued expenses 620 610
Other payables 827 —
Total Current Liabilies 2,845 1,265
(In thousands of $)
Year ended
December
31, 2021
Year ended
December
31, 2020
Interest income on bank deposits — 142
Net gains on investments at FVTPL — —
Fees collected from ADS holders 484 402
Interest on I/C current account — —
Financial income 484 544
Net losses on investments at FVTPL (364) (538)
Interest expense (116) (86)
Other nancial expenses (44) (27)
Financial expenses (524) (652)
Exchange gains/(losses) (5,191) (1,519)
Financial income and expense (5,231) (1,626)
All current liabilies fall due in less than one year. The fair value of the current liabilies approximates the nominal value,
due to their short-term character.
304 | Notes to The Company Financial Statements of argenx SE
Notes to The Company Financial Statements of argenx SE | 305
3 Receivables
Receivables fall due in less than one year. The fair value of the receivables approximates the nominal value, due to their
short-term character.
4 Financial Assets
(In thousands of $)
At December
31, 2021
At December
31, 2020
Money market funds 4,985 5,430
Term account — —
Total Financial asssets 4,985 5,430
(In thousands of $)
At December
31, 2021
At December
31, 2020
Interest receivable — —
Other receivables 949 505
Prepaid expenses 1,044 5,650
Total Receivables 1,993 6,155
(In thousands of $)
Share
Capital
Share
Premium
Retained
Earnings
Other
Reserves
Translaon
Reserves
Total
Equity
Equity per 1 January 2021 in EUR 4,757 2,058,122 (861,491) 154,977
—
1,356,365Equity per 1 january 2021 at closing rate
USD/EUR 31 December 2021
5,837 2,525,522 (1,057,136) 190,173 — 1,664,396
Correcon for historical rate (93) (186,488) 65,204 (12,664) 134,041 —
Equity per 1 January 2021 in USD 5,744 2,339,033 (991,931) 177,509 134,041 1,664,396
Result of the year — — (408,265) — — (408,265)
SPB result — — — 179,366 — 179,366
Capital increase exercised stock opons 59 32,906 — — — 32,965
Capital increase nancing 2021 430 1,090,836 — — — 1,091,266
Equity per 31 December 2021 in USD 6,233 3,462,775 (1,400,196) 356,875 134,041 2,559,728
PART VIII
Other Information
Provision in the Articles of Association Governing the Appropriation
of Results
1. The company shall have a policy on reserves and dividends which shall be determined and may be amended by the
board of directors. The adopon and thereaer each material change of the policy on reserves and dividends shall be
discussed at the general meeng under a separate agenda item.
2. From the prots, shown in the annual accounts, as adopted, the board of directors shall determine which part shall
be reserved. Any prots remaining thereaer shall be at the disposal of the general meeng. The board of directors
shall make a proposal for that purpose. A proposal to pay a dividend shall be dealt with as a separate agenda item at
the general meeng.
3. Distribuon of dividends on the shares shall be made in proporon to the nominal value of each share.
4. Distribuons may be made only insofar as the company’s equity exceeds the amount of the paid in and called up part
of the issued capital, increased by the reserves which must be kept by virtue of the law.
5. If a loss was suered during any one year, the board of directors may resolve to oset such loss by wring it o
against a reserve which the company is not required to keep by virtue of the law.
6. The distribuon of prots shall be made aer the adopon of the annual accounts, from which it appears that the
same is permied.
7. The board of directors may, subject to due observance of the policy of the company on reserves and dividends,
resolve to make an interim distribuon, provided the requirement of paragraph 4 of this arcle has been complied
with, as shown by interim accounts. Such interim accounts shall show the nancial posion of the company not earli
-
er than on the rst day of the third month before the month in which the resoluon to make the interim distribuon
is announced. Such interim accounts shall be signed by all members of the board of directors. If the signature of one
or more of them is missing, this shall be stated and reasons for this omission shall be given. The interim accounts
shall be deposited in the oces of the trade register within eight days aer the day on which the resoluon to make
the interim distribuon has been announced.
8. At the proposal of the board of directors, the general meeng may resolve to make a distribuon on shares wholly or
partly not in cash but in shares.
9. The board of directors may, subject to due observance of the policy of the company on reserves and dividends, re
-
solve that distribuons to holders of shares shall be made out of one or more reserves.
10. A claim of a shareholder for payment of a distribuon shall be barred aer ve years have elapsed.
306 | Notes to The Company Financial Statements of argenx SE
Other Information | 307
9 Share in Result of Subsidiaries
As of December 31, 2021, the Company had two Belgian subsidiaries, argenx BV and argenx IIP BV, which jointly carry out
the research and development acvies of the Group.
10 Other Disclosures
CONTINGENT LIABILITIES
The conngent liabilies of the Company consist of a rental agreement for oce space at DocWork Breda for an amount
of KEUR 6 per annum. The lease can be terminated annually.
RELATED-PARTY TRANSACTIONS
All legal enes that can be controlled, jointly controlled or signicantly inuenced are considered as a related party.
Also, enes which can control the company are considered a related party. In addion, directors, other key manage
-
ment of argenx SE and close relaves are regarded as related pares. Other than the intercompany cross-charges, there
were no related party transacons.
REMUNERATION
See note 27 of the notes to the consolidated IFRS nancial statements.
INFORMATION RELATING TO EMPLOYEES
During the year 2021, the Company had an average of 0.2 FTE (2020: 0.2 FTE).
AUDITOR’S FEES
See note 30 of the notes to the consolidated IFRS nancial statements.
PROPOSAL FOR APPROPRIATION OF THE RESULT
The Company reported a net loss of $408.3 million for the year ended on December 31, 2021. The Board of Directors pro
-
poses to carry forward the net loss of the year 2021 to the accumulated losses. Ancipang the approval of the nancial
statements by the shareholders at the annual general meeng of shareholders, this proposal has already been reected
in the 2021 nancial statements.
EVENTS AFTER THE BALANCE SHEET DATE
For the events aer balance sheet date, we refer to note 32 of the consolidated IFRS nancial statements.
Breda, March 18, 2022
The Director
Tim Van Hauwermeiren, CEO
(In thousands of $)
Year ended
December
31, 2021
Year ended
December
31, 2020
argenx BV (421,774) (572,033)
argenx IIP BV (16,195) (17,635)
(437,968) (589,668)
PART VIII
308 | Independent Auditor’s Report
Independent Auditor’s Report | 309
Materiality
Based on our professional judgement we determined the materiality for the nancial statements as a whole at USD
29,500,000. The materiality is based on 3.5% of operang expenses. We have also taken into account misstatements and/
or possible misstatements that in our opinion are material for the users of the nancial statements for qualitave reasons.
We agreed with the Board of Directors that misstatements in excess of USD 1,475,000, which are idened during the audit,
would be reported to them, as well as smaller misstatements that in our view must be reported on qualitave grounds.
Scope of the group audit
argenx SE is at the head of a group of enes. The nancial informaon of this group is included in the consolidated
nancial statements of argenx SE.
Because we are ulmately responsible for the opinion, we are also responsible for direcng, supervising and performing
the group audit. In this respect we have determined the nature and extent of the audit procedures to be carried out
for group enes. The audit procedures on all group enes have been performed by the group engagement team. By
performing these proceduresat group enes, together with addional procedures at group level, we have been able to
obtain sucient and appropriate audit evidence about the group’s nancial informaon to provide an opinion about the
consolidated nancial statements.
Audit approach fraud risks
In accordance with the Dutch Standards on Auding, we are responsible for obtaining reasonable assurance that the
nancial statements taken as a whole are free from material misstatements, whether due to fraud or error.
Inherent to our responsibilies for the audit of the nancial statements, there is an unavoidable risk that material
misstatements go undetected, even though the audit is planned and performed in accordance with Dutch law. The risk
of undetected material misstatements due to fraud is even higher, as fraud may involve collusion, forgery, intenonal
omissions, misrepresentaons, or the override of internal control. Also, we are not responsible for the prevenon and
detecon of fraud and non-compliance with all laws and regulaons. Our audit procedures dier from a forensic or legal
invesgaon, which oen have a more in-depth character.
We idened and assessed the risks of material misstatements of the nancial statements due to fraud. During our audit
we obtained an understanding of the enty and its environment and the components of the system of internal control,
including the risk assessment process and management’s process for responding to the risks of fraud and monitoring the
system of internal control and how the Board of Directors exercises oversight, as well as the outcomes. In obtaining our
understanding we performed inquiries with management (Chief Execuve Ocer, Chief Operang Ocer, Chief Financial
Ocer), those charged with governance and others within the company. We evaluated the design and relevant aspects
of the system of internal control and in parcular the fraud risk assessment, as well as among others the code of conduct
and whistle blower procedures. We evaluated the design and the implementaon and tested the operang eecve
-
ness of internal controls designed to migate fraud risks. As part of our process of idenfying fraud risks, we evaluated
fraud risk factors with respect to nancial reporng fraud, misappropriaon of assets and bribery and corrupon in close
co-operaon with our forensic specialists. We evaluated whether these factors indicate that a risk of material misstate
-
ment due to fraud is present.
Following these procedures, and the presumed risks under the prevailing audit standards, we considered fraud risks relat
-
ed to management override of controls, including evaluang whether there was evidence of bias by the Execuve Board,
the execuve leadership team and other members of management, which may represent a risk of material misstatement
due to fraud. Our audit procedures to respond to these fraud risks include, among others, an evaluaon of relevant inter
-
nal controls and supplementary substanve audit procedures, including detailed tesng of journal entries, evaluang the
accounng esmates for bias and review of the supporng documentaon in relaon to post-closing adjustments. Data
analycs, including selecon of journal entries based on risk-based characteriscs, form part of our audit approach to
address the idened fraud risks.
Addionally, we performed further procedures including, among others, the following:
Independent Auditor’s Report
To the shareholders of.
Report on the Audit of the Financial Statements for the year ended December 31, 2021
included in the Annual Report
Our opinion
We have audited the accompanying nancial statements for the year ended December 31, 2021 of argenx SE, based
in Breda, the Netherlands. The nancial statements comprise the consolidated nancial statements and the company
nancial statements.
In our opinion:
• The accompanying consolidated nancial statements give a true and fair view of the nancial posion of argenx SE as
at December 31, 2021, and of its result and its cash ows for the year ended December 31, 2021 in accordance with
Internaonal Financial Reporng Standards as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of
the Dutch Civil Code.
• The accompanying company nancial statements give a true and fair view of the nancial posion of argenx SE as at
December 31, 2021, and of its result for the year ended December 31, 2021 in accordance with Part 9 of Book 2 of the
Dutch Civil Code.
The consolidated nancial statements comprise:
1. The consolidated statements of nancial posion at December 31, 2021.
2. The following statements for the year ended December 31, 2021: the consolidated statements of prot or loss,
the consolidated statements of comprehensive income and loss, the consolidated statements of cash ows and the
consolidated statements of changes in equity.
3. The notes comprising a summary of the signicant accounng policies and other explanatory informaon.
The company nancial statements comprise:
1. The company balance sheet as at December 31, 2021.
2. The company prot or loss account for the year ended December 31, 2021.
3. The notes comprising a summary of the accounng policies and other explanatory informaon.
Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auding. Our responsibilies
under those standards are further described in the “Our responsibilies for the audit of the nancial statements” secon
of our report.
We are independent of argenx SE in accordance with the EU Regulaon on specic requirements regarding statutory audit
of public-interest enes, the Wet toezicht accountantsorganisaes (Wta, Audit rms supervision act), the Verordening
inzake de onaankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional Accountants, a
regulaon with respect to independence) and other relevant independence regulaons in the Netherlands. Furthermore,
we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics).
We believe the audit evidence we have obtained is sucient and appropriate to provide a basis for our opinion.
PART VIII
310 | Independent Auditor’s Report
Independent Auditor’s Report | 311
• We incorporated elements of unpredictability in our audit. We also considered the outcome of our other audit proce
-
dures and evaluated whether any ndings were indicave of fraud or non-compliance.
• We evaluated whether the selecon and applicaon of accounng policies, parcularly those related to subjecve
measurements, may be indicave of fraudulent nancial reporng.
• We evaluated whether the judgments and decisions made by management in making the accounng esmates includ
-
ed in the nancial statements indicate a possible bias that may represent a risk of material misstatement due to fraud.
Management insights, esmates and assumpons that might have a major impact on the nancial statements are
disclosed in Note 4 of the nancial statements.
Our procedures to address fraud risks did not result in a Key Audit Maer.
Audit approach compliance with laws and regulaons
We assessed the laws and regulaons relevant to the Company through discussion with the legal counsel, reading
minutes and reports of internal audit. We involved our forensic specialists in this evaluaon.
As a result of our risk assessment procedures, and while realizing that the eects from non-compliance could consid
-
erably vary, we considered the following laws and regulaons: adherence to (corporate) tax law and nancial reporng
regulaons, the requirements under the Internaonal Financial Reporng Standards as adopted by the European Union
(EU-IFRS) and Part 9 of Book 2 of the Dutch Civil Code with a direct eect on the nancial statements as an integrated
part of our audit procedures, to the extent material for the related nancial statements. We obtained sucient appropri
-
ate audit evidence regarding provisions of those laws and regulaons generally recognized to have a direct eect on the
nancial statements.
Apart from these, the company is subject to other laws and regulaons where the consequences of non-compliance
could have a material eect on amounts and/or disclosures in the nancial statements, for instance, through imposing
nes or ligaon. Given the nature of the company’s business and the complexity of law or regulaons, there is a risk of
non-compliance with the requirements of such laws and regulaons. In addion, we considered major laws and regula
-
ons applicable to listed companies.
Our procedures are more limited with respect to these laws and regulaons that do not have a direct eect on the de
-
terminaon of the amounts and disclosures in the nancial statements. Compliance with these laws and regulaons may
be fundamental to the operang aspects of the business, to argenx’s ability to connue its business, or to avoid material
penales (e.g., with laws and regulaons as SEC regulaons, Dutch Stock exchange regulaons, FDA regulaons and EMA
regulaons to the extent material for the nancial statements of the company) and therefore non-compliance with such
laws and regulaons may have a material eect on the nancial statements. Our responsibility is limited to undertaking
specied audit procedures to help idenfy non-compliance with those laws and regulaons that may have a material eect
on the nancial statements. Our procedures are limited to (i) inquiry of management, the Board of Directors and others
within the company as to whether the company is in compliance with such laws and regulaons and (ii) inspecng corre
-
spondence, if any, with the relevant licensing or regulatory authories to help idenfy non-compliance with those laws
and regulaons that may have a material eect on the nancial statements.
Naturally, we remained alert to indicaons of (suspected) non-compliance throughout the audit. Finally, we obtained
wrien representaons that all known instances of (suspected) fraud or non-compliance with laws and regulaons have
been disclosed to us.
Audit approach going concern
Our responsibilies, as well as the responsibilies of the management and the Board of Directors, related to going
concern under the prevailing standards are outlined in the “Descripon of responsibilies regarding the nancial state
-
ments” secon below. In fullling our responsibilies, we performed procedures including evaluang management’s
assessment of the company’s ability to connue as a going concern and considering the impact of nancial, operaonal,
and other condions. Based on these procedures, we did not idenfy any reportable ndings related to the enty’s abili
-
ty to connue as a going concern.
Our key audit maers
Key audit maers are those maers that, in our professional judgement, were of most signicance in our audit of the
nancial statements. We have communicated the key audit maers to the Board of Directors. The key audit maers are
not a comprehensive reecon of all maers discussed.
These maers were addressed in the context of our audit of the nancial statements as a whole and in forming our
opinion thereon, and we do not provide a separate opinion on these maers.
Trade and Other Payables – Research and development cost accruals — Refer to Note 15
to the financial statements
Descripon Our response
The company recognizes costs of USD 163.7 million, as specied
in Note 15 to the nancial statements, incurred for clinical trial
acvies as research and development expenses based on
evaluaon of its vendors’ progress toward compleon of specic
tasks. Payment ming may dier signicantly from the period in
which the costs are recognized as expense, resulng in research
and development cost accruals recognized within Trade and
Other Payables in the Statement of Financial Posion.
Determinaon of the research progress and the translaon of the
progress to the research and development cost accruals requires
judgment, because such progress is not directly observable.
In esmang the vendors’ progress toward compleon of
specic tasks, the company therefore uses data such as paent
enrollment, clinical site acvaons and vendor informaon of
actual costs incurred. This data is obtained through reports
from or discussions with company personnel and outside service
providers as to the progress or state of compleon of trials, or
the compleon of services. Costs are expensed over the service
period the services are provided. Costs for services provided that
have not yet been paid are recognized as accruals.
We idened the research and development cost accruals as a
crical audit maer due to the number of ongoing clinical trial
acvies and the subjecvity involved in esmang research
and development cost accruals and as auding the research and
development cost accruals involves judgement in evaluang the
progress of the research and development acvies relave to
the costs incurred.
Our audit procedures related to the research and development
cost accruals included the following, among others:
•
We tested controls over the appropriateness of the recording
of the research and development accruals reecng the
progress of the clinical trials, including the quarterly review
meengs between the nance department and clinical research
personnel.
•
We read selected research and collaboraon agreements, as
well as amendments thereto, to evaluate whether the progress
of the clinical trials reects all relevant contractual elements.
•
We considered publicly available informaon (such as press
releases and investor presentaons) and board of directors’
materials regarding the status of clinical trial acvies and
evaluated this informaon to the judgements applied in
recording the accruals.
•
For a selecon of contracts, we compared the amount of
accruals at the end of the prior period to current year acvity
and evaluated the accuracy of the company’s esmaon
methodology
•
We performed conrmaon procedures with vendors related
to the progress of signicant projects to test the research and
development cost input calculaons.
•
We made selecons of specic amounts recognized as research
and development expense as well as those recognized as
accrued expenses and performed the following procedures:
-
Evaluated management’s esmate of the vendor’s progress
based on inquiries with company clinical operaons personnel.
-
Reconciled any available related statement of work, purchase
order, or other supporng documentaon to management’s
esmate (such as communicaons between the company and
vendors).
OBSERVATIONS
The scope and nature of the audit procedures we performed
was sucient and appropriate to address the risks of material
misstatement related to the research and development cost
accruals.
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Independent Auditor’s Report | 313
Report on the other information included in the Annual Report
In addion to the nancial statements and our auditor’s report thereon, the annual report contains other informaon
that consists of:
• The Business secon.
• The Corporate Governance secon, including the Remuneraon Report.
• Other Informaon as required by Part 9 of Book 2 of the Dutch Civil Code.
Based on the following procedures performed, we conclude that the other informaon:
• Is consistent with the nancial statements and does not contain material misstatements.
• Contains the informaon as required by Part 9 of Book 2 of the Dutch Civil Code.
We have read the other informaon. Based on our knowledge and understanding obtained through our audit of the
nancial statements or otherwise, we have considered whether the other informaon contains material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the
Dutch Standard 720. The scope of the procedures performed is substanally less than the scope of those performed in
our audit of the nancial statements.
Management is responsible for the preparaon of the other informaon, including the Management’s Board’s Report in
accordance with Part 9 of Book 2 of the Dutch Civil Code, and the other informaon as required by Part 9 of Book 2 of
the Dutch Civil Code.
Report on the other legal and regulatory requirements
Engagement
We were engaged by the Board of Directors as auditor of argenx SE on May 13, 2015, as of the audit for the year 2015
and have operated as statutory auditor ever since that nancial year.
No prohibited non-audit services
We have not provided prohibited non-audit services as referred to in Arcle 5(1) of the EU Regulaon on specic require
-
ments regarding statutory audit of public-interest enes.
European Single Electronic Reporng Format (ESEF)
In the Commission Delegated Regulaon (EU) 2019/815 of 17 December 2018 supplemenng Direcve 2004/109/EC of
the European Parliament and of the Council with regard to regulatory technical standards on the specicaon of a single
electronic reporng format is regulated that the Annual Report of the company has to be prepared in a single electronic
reporng format (“ESEF”). The requirements to be met are set out in the aforemenoned delegated regulaon (these
requirements are hereinaer referred to as: the RTS on ESEF).
In our opinion, the Annual Report made up in XHTML format, including the partly tagged Consolidated Financial State
-
ments as included in the reporng package by the Company, has been prepared in all material respects in accordance
with the RTS on ESEF.
Management is responsible for preparing the Annual Report including the nancial statements in accordance with the
RTS on ESEF, whereby management combines the various components in a reporng package. Our responsibility is to ob
-
tain reasonable assurance for our conclusion whether the Annual Report in this reporng package, is in accordance with
the requirements. We have taken into consideraon what is stated in Alert 43. Our procedures included:
Revenue – Determination of appropriate accounting of the license and collaboration
agreement — Refer to Note 16 to the financial statements
Descripon Our response
The company recognized revenue of USD 178.4 million related
to a license and collaboraon agreement with Zai Lab Limited.
Under the terms of the agreement, the company received USD
175 million in collaboraon payments, consisng of an upfront
payment and milestone payment. The upfront payment of
USD 150 million is comprised of a USD 75 million upfront cash
payment and a USD 75 million payment in the form of newly
issued Zai Lab shares. The company has received an addional
milestone payment of USD 25 million upon obtaining regulatory
approval of efgargimod by the FDA in the US. In addion, the
company is eligible to receive ered royales based on annual
net sales of efgargimod in Greater China.
The company’s license and collaboraon agreement has been
determined as represenng two disnct performance obligaons,
being the transfer of the license over efgargimod and the at
arms-length supply of clinical and commercial product to Zai
Lab Limited. The upfront payment and milestone payment are
allocated to the performance obligaon related to the transfer of
the license, whereas sales-based royales and revenue generated
from supplying Zai Lab Limited with drug product are allocated to
the performance obligaon related to the supply of product.
The company concluded that the license has standalone value
as of the eecve date of the contract. Therefore, the revenue
related to the transfer of the license has been recognized at a
point in me upon fulllment of the performance obligaon,
being the granng of the license to Zai Lab Limited. The milestone
payment was considered constrained upon the eecve date of
the contract and was recognized at the point in me of obtaining
the FDA approval of efgargimod. Revenue from royales and
supply of drug product to Zai Lab Limited will be recognized upon
fulllment of the performance obligaon related to the supply of
drug product.
Given the complexity involved in determining the appropriate
accounng treatment in line with IFRS and the fact that it is the
rst me that the efgargimod license is considered to have
standalone value for the company, we idened the inial
accounng treatment of the license and collaboraon agreement
with Zai Lab Limited as a crical audit maer.
Our audit procedures for the accounng of the collaboraon and
license agreement included the following, among others:
•
We tested the controls over the appropriateness of the
accounng of the license and collaboraon agreement,
including the review by management of the appropriate
accounng treatment.
•
We read the license and collaboraon agreement and evaluated
whether management’s accounng posion considered all
relevant facts and terms included in the agreement.
•
We further evaluated management’s accounng posion paper
and evaluated management’s conclusions to determine whether
they had appropriately considered and applied the guidance
and interpretaon within IFRS 15.
•
We have consulted with our nancial reporng experts on
the accounng treatment of the license and collaboraon
agreement.
OBSERVATIONS
The scope and nature of the audit procedures we performed
was sucient and appropriate to address the risks of material
misstatement related to the accounng of the license and
collaboraon agreement.
314 | Independent Auditor’s Report
PART VIII
Independent Auditor’s Report | 315
• Obtaining an understanding of the enty’s nancial reporng process, including the preparaon of the reporng package;
• Obtaining the reporng package and performing validaons to determine whether the reporng containing the Inline
XBRL instance document and the XBRL extension taxonomy les have been prepared in accordance with the technical
specicaons; and
• Examining the informaon related to the Consolidated Financial Statements in the reporng package to determine
whether all required tagging has been applied and whether they are in accordance with the RTS on ESEF.
Description of responsibilities regarding the Financial Statements
Responsibilies of management and the Board of Directors for the nancial statements
Management is responsible for the preparaon and fair presentaon of the nancial statements in accordance with
EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, management is responsible for such internal control
as management determines is necessary to enable the preparaon of the nancial statements that are free from material
misstatement, whether due to fraud or error.
As part of the preparaon of the nancial statements, management is responsible for assessing the company’s ability
to connue as a going concern. Based on the nancial reporng frameworks menoned, management should prepare
the nancial statements using the going concern basis of accounng unless management either intends to liquidate the
company or to cease operaons, or has no realisc alternave but to do so.
Management should disclose events and circumstances that may cast signicant doubt on the company’s ability to
connue as a going concern in the nancial statements.
The Board of Directors is responsible for overseeing the company’s nancial reporng process.
Our responsibilies for the audit of the nancial statements
Our objecve is to plan and perform the audit assignment in a manner that allows us to obtain sucient and appropriate
audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all
material errors and fraud during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to inuence the economic decisions of users taken on the basis of these nancial statements.
The materiality aects the nature, ming and extent of our audit procedures and the evaluaon of the eect of idened
misstatements on our opinion.
We have exercised professional judgement and have maintained professional skepcism throughout the audit, in ac
-
cordance with Dutch Standards on Auding, ethical requirements and independence requirements. Our audit included
among others:
• Idenfying and assessing the risks of material misstatement of the nancial statements, whether due to fraud or error,
designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is sucient
and appropriate to provide a basis for our opinion. The risk of not detecng a material misstatement resulng from
fraud is higher than for one resulng from error, as fraud may involve collusion, forgery, intenonal omissions, misrep
-
resentaons, or the override of internal control.
• Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the eecveness of the
company’s internal control.
• Evaluang the appropriateness of accounng policies used and the reasonableness of accounng esmates and related
disclosures made by management.
• Concluding on the appropriateness of management’s use of the going concern basis of accounng, and based on the
audit evidence obtained, whether a material uncertainty exists related to events or condions that may cast signicant
doubt on the company’s ability to connue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw aenon in our auditor’s report to the related disclosures in the nancial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditor’s report. However, future events or condions may cause the company to cease to connue as a
going concern.
• Evaluang the overall presentaon, structure and content of the nancial statements, including the disclosures.
• Evaluang whether the nancial statements represent the underlying transacons and events in a manner that
achieves fair presentaon.
We communicate with the Board of Directors regarding, among other maers, the planned scope and ming of the
audit and signicant audit ndings, including any signicant ndings in internal control that we idened during our
audit. In this respect we also submit an addional report to the audit commiee in accordance with Arcle 11 of the EU
Regulaon on specic requirements regarding statutory audit of public-interest enes. The informaon included in this
addional report is consistent with our audit opinion in this auditor’s report.
We provide the Board of Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and communicate with them all relaonships and other maers that may reasonably be thought to bear
on our independence, and where applicable, related safeguards.
From the maers communicated with the Board of Directors, we determine the key audit maers: those maers that
were of most signicance in the audit of the nancial statements. We describe these maers in our auditor’s report
unless law or regulaon precludes public disclosure about the maer or when, in extremely rare circumstances, not
communicang the maer is in the public interest.
Roerdam, March 21, 2022
Deloie Accountants B.V. Inial for idencaon purposes:
P.J. Seegers
314 | Independent Auditor’s Report
9
PART IX
Information
Incorporated by
Reference
9 Information
318 | Information Incorporated by Reference Information Incorporated by Reference | 319
PART IX
Our consolidated nancial statements as of and for the nancial years ended December 31, 2021, 2020 and 2019 (in
-
cluding the independent auditor’s reports thereupon) have been incorporated by reference in this Universal Registraon
Document. We have incorporated certain documents into this Universal Registraon Document by reference. The parts
of the documents incorporated herein by reference to which no specic reference has been made are either not relevant
for investors or are covered elsewhere in this Universal Registraon Document.
The following table contains a cross-reference list to the relevant pages of our consolidated nancial statements for the
nancial year ended December 31, 2021, which are incorporated by reference in this Universal Registraon Document:
The following table contains a cross-reference list to the relevant pages of the nancial statements of argenx SE for the
nancial year ended December 31, 2021, which are incorporated by reference in this Universal Registraon Document:
The following table contains a cross-reference list to the relevant pages of our annual report 2020 on which can be
found our consolidated nancial statements for the nancial year ended December 31, 2020, which are incorporated
by reference in this Registraon Document:
Consolidated statement of nancial posion p. 250
Consolidated statement of prot or loss and other comprehensive income p. 252
Consolidated statement of cash ows p. 254
Consolidated statement of changes in equity p. 255
Notes to the consolidated nancial statements for the year 2021 p. 256
Consolidated statement of nancial posion p. 250
Consolidated statement of prot or loss and other comprehensive income p. 252
Consolidated statement of cash ows p. 254
Consolidated statement of changes in equity p. 255
Notes to the consolidated nancial statements for the year 2020 p. 256
Company balance sheet on December 31, 2021 p. 300
Company prot or loss account for the year ended December 31, 2021 p. 301
Notes to the nancial statements p. 302
Independent auditor’s report on the nancial statements p. 308
The full text of the Arcles of Associaon and an unocial English translaon thereof are incorporated by reference in
this Registraon Document. Any informaon not listed in the tables above but included in the document The full text of
the Arcles of Associaon and an unocial English translaon thereof are incorporated by reference in this Universal
Registraon Document.
Any informaon not listed in the tables above but included in the document incorporated by reference is given for infor
-
maon purpose only.
The documents incorporated by reference are available on our website (www.argenx.com), at the following locaons:
The following table contains a cross-reference list to the relevant pages of our annual report 2019 on which can be
found our consolidated nancial statements for the nancial year ended December 31, 2019, which are incorporated
by reference in this Registraon Document:
Annual report 2019 hps://www.argenx.com/sites/default/les/media-documents/argenx_Annual_Report_2019.pdf
Annual report 2020 hps://www.argenx.com/sites/default/les/report/argenx_report_2020_March_30_2021.pdf
Annual report 2021 hps://www.argenx.com/sites/default/les/report/argenx_report_2021_March_21_2022.pdf
Arcles of associaon hps://www.argenx.com/sites/default/les/media-documents/argenx_SE_Arcles_of_Associaon_
Consolidated_Version-NL.pdf
hps://www.argenx.com/sites/default/les/media-documents/argenx_SE_Arcles_of_Associaon_
Consolidated_Translaon-ENG.pdf
Remuneraon Policy
hps://www.argenx.com/sites/default/les/media-documents/argenx_remuneraon_policy_nal_
approved_11_May_2021.pdf
Consolidated statement of nancial posion p. 250
Consolidated statement of prot or loss and other comprehensive income p. 252
Consolidated statement of cash ows p. 254
Consolidated statement of changes in equity p. 255
Notes to the consolidated nancial statements for the year 2020 p. 256
PART X
Glossary
10
Contents
Cross Reference Table for Annual Reporng Requirements 322
Glossary 324
PART X
322 | Cross Reference Table for Annual Reporting Requirements Cross Reference Table for Annual Reporting Requirements | 323
Cross Reference Table for Annual
Reporting Requirements
The following list of cross references idenes where each item required for us to disclose in our yearly nancial report
can be found in this Registraon Document.
Management Conrmaons
With due regard to best pracce principle 1.4.3 of the Dutch Corporate Governance Code, we conrm that:
(i) This Univeral Registraon Document provides sucient insights into any failings in the eecveness of the
internal risk management and control systems, as is further substanated in chapter 2 “Risk Factors”, and secon
4.5 “Risk Appete & Control”;
(ii) The risk- and control systems described herein, parcularly in paragraph 4.5.5 “Financial Risks and Controls”
provide reasonable assurance that the nancial reporng does not contain any material inaccuracies;
(iii) We conrm that we expect that our exisng cash and cash equivalents and current nancial assets will enable us
to fund our operang expenses and capital expenditure requirements through at least the next twelve months.
On the basis of the current state of aairs, it is jused that the nancial reporng is prepared on a going concern
basis; and
(iv) This report, parcularly chapter 2 “Risk Factors” states those material risks and uncertaines that are relevant to
the expectaon of our connuity for the period of twelve months aer the preparaon of this Universal Registra
-
on Document. The aforemenoned statement does not in any way limit the relevance or applicability of the Risk
Factors set out in this Universal Registraon Document to the aforemenoned period of twelve months.
/Signed on behalf of argenx SE/
SOURCE OF REQUIREMENT
Topic Locaon
Arcle 2:391 DCC, RJ 400,
RJ 405
Report on the company’s acvies
1
Shareholder Leer
Presentaon of the Group
Corporate structure 5 General Descripon of the Company
and its Share Capital
Board of directors report 4 Corporate Governance
Primary risks and uncertaines 2 Risk Factors
Risk appete & control 4.5 Risk Appete & Control
Analysis of nancial
condion and results
6 Operang and Financial Review
Informaon on research and
development acvies
1.3
1.4
1.5
Our Products and Product Candidates
Collaboraon Agreements
License Agreements – General
Forward looking paragraph Outlook 2022
Compensaon statements and
remuneraon report
4.4 Remuneraon Report of the Remuneraon
and Nominaon Commiee
RJ 430 Key gures, raos etc. 6 Operang and Financial Review
Arcle 2:392 DCC/RJ 410
Auditors opinion 8 Aached to the 2021 Financial Report
included herein
Arcles of associaon on the
distribuon of prots
5.12 Arcles of Associaon on Prots,
distribuons and losses
List of subsidiaries 1.1.1 Group Structure
Decree on contents of
board report (
besluit
inhoud bestuursverslag
)
Arcle 2:391 sub 5 DCC
Corporate governance code comply-
or-explain
4.1 Dutch Corporate Governance Code,
“Comply or Explain”
Main elements of nancial
management & control systems
in connecon with the company’s
nancial reporng
4.5.5 Financial Risks and Controls
Funconing of the general meeng 5.4 General Meeng of Shareholders and Vong
Rights
Composion and funconing of the
board of directors and its commiees
4.2.3
4.2.4
Board of Directors
Non-Execuve Directors
Arcle 10 Decree
Takeover Direcve
(
besluit overnamerichtlijn
),Arcle 2:391 sub 5 DCC
Capital structure 5 General Descripon of the Company
and its Share Capital
Principal shareholders 5.3 Share Classes and Principal Shareholders
Parcular shareholder rights and
limitaons thereof
5.4
General meengs of Shareholders
and Vong Rights
Procedure for appointment
of board members
4.2 Management Structure
Procedure for amending the
arcles of associaon
5.6 Amendment of Arcles of Associaon
Authority of the board of directors to
issue or acquire shares
5.2.5
5.2.7
Issue of Shares
Acquision of Shares in argenx’s Capital
Material arrangements, to which the
company is a party, in relaon to a
public oer
5.5 An-Takeover Provisions
RJ = Guidelines on Annual Reporng (
Richtlijnen voor de Jaarverslaggeving
)
324 | Glossary Glossary | 325
AbbVie AbbVie S.Á.R.L.
ABSIS autoimmune bullous skin disorder intensity score
ACA
the Paent Protecon and Aordable Care Act, as amended by the Health Care
and Educaon Reconciliaon Act of 2010
AChR an-acetylcholine receptor
ADCC anbody dependent cell-mediated cytotoxicity
ADR American Depositary Receipt
ADS American Depositary Share
AFM the Dutch Authority for the Financial Markets (
Schng Autoriteit Financiële Markten
)
AIA
America Invents Act
AgomAb AgomAb Therapeucs NV
AKS
the U.S. federal An-Kickback Statute
ALS amyotrophic lateral sclerosis
AML acute myeloid leukemia
argenx or the Company
argenx SE
Arcles of Associaon our current arcles of associaon
ASyS an-synthetase syndrome
ASP average sales price
Autoanbodies self-directed anbodies
B-cell B lymphocyte producing a specic anbody
BioWa BioWa, Inc
Bird Rock Bio Bird Rock Bio, Inc.
BLA biologics license applicaon
Board By-Laws
the rules adopted by our Board of Directors that describe the procedure for holding
meengs of the Board of Directors, for the decision-making by the Board of Directors and the
Board of Directors’ operang procedures
Board of Directors consisng of our execuve director(s) and our non-execuve directors.
BP bullous pemphigoid
BPCIA the U.S. Biologics Price Compeon and Innovaon Act
Broteio Broteio Pharma B.V.
C2 component 2
CBA
a collecve bargaining agreement
cGMP current good manufacturing pracces
CH Switzerland
CHMP Commiee for Medicinal Products for Human Use
Chugai Chugai Pharmaceucal Co., Ltd.
CIDP chronic inammatory demyelinang polyneuropathy
Cilag
Cilag GmbH Internaonal, one of the Janssen Pharmaceucal Companies
of Johnson & Johnson
CMOs contract manufacturing organizaons
CMMI Center for Medicare and Medicaid Innovaon
CMS Centers for Medicare & Medicaid
Code of Conduct our Code of Business Conduct and Ethics
CR Complete remission
CRO
contract research organizaon
CTA
clinical trial authorizaon applicaon
CTCL
cutaneous T-cell lymphoma
DCC Dutch Civil Code
Deloie Deloie Accountants B.V.
DFSA
Dutch Financial Supervision Act (Wet op het nancieel toezicht)
DM dermatomyosis
DRC
Data Review Commiee
DSMB Data Safety Monitoring Board
Dutch Corporate Governance Code
the Dutch Corporate Governance Code dated December 8, 2016, which is in force
as of the nancial year starng on or aer January 1, 2017
EEA
European Economic Area
Elektro Elektro, Inc.
EMA European Medicines Authority
EMEA Europe, Middle East and Africa
ENHANZE® ENHANZE® technology
Enterprise Chamber
the Dutch Enterprise Chamber of the Amsterdam Court of Appeal (Ondernemingskamer
van het Gerechtshof te Amsterdam)
Euronext Brussels
the regulated market operated by Euronext Brussels SA/NV, a regulated market within the
meaning of Direcve 2014/65/EU of the European Parliament and of the Council of May 15 ,
2014 on markets in nancial instruments amending Council Direcves 2004/39/EC, Direcve
85/611/EEC, 93/6/EEC and Direcve 2000/12/EC of the European Parliament and of the
Council and repealing Council Direcve 93/22/EEC (MiFID II)
Exchange Act the U.S. Securies Exchange Act of 1934, as amended
FairJourney FairJourney LDA
Fc
anbody region interacng with cell surface Fc receptors
FcRn neonatal Fc receptor
FDA
U.S. Food and Drug Administraon
FDCA the U.S. Federal Food, Drug, and Cosmec Act
GARP glycoprotein A repeons predominant
GCC
Gulf Cooperaon Council, comprising Saudi Arabia, Kuwait, the United Arab Emirates,
Qatar, Bahrain and Oman
GCP Good Clinical Pracce
GDPR
Regulaon (EU) 2016/679 of the European Parliament and of the Council of April 27, 2016 on
the protecon of natural persons with regard to the processing of personal data and on the
free movement of such data
General Meeng
any general meeng of shareholders of argenx SE (i. e. any annual general meeng and any
extraordinary general meeng)
Genor Biopharma Genor Biopharma Co. Ltd
Genpharm Genpharm Services FZ-LLC
GLP Good Laboratory Pracce
gMG generalized myasthenia gravis
PART X
Glossary
The following explanaons are intended to assist the general reader to understand certain terms used in this Universal
Registraon Document. The denions set out below apply throughout this Universal Registraon Document, unless
the context requires otherwise.
GPCR G-protein coupled receptors
Group argenx SE together with its subsidiaries
GSK GlaxoSmithKline plc
Halozyme Halozyme Inc.
Hatch-Waxman Act the U.S. Drug Price Compeon and Patent Term Restoraon Act of 1984
HGF hepatocyte growth factor
HIPAA the U.S. federal Health Insurance Portability and Accountability Act of 1996
HITECH the Health Informaon Technology for Economic and Clinical Health Act of 2009
HTA
a health technology assessment
I-RODS Inammatory Rasch-built Overall Disability Scale
IFRS
Internaonal Financial Reporng Standards, as issued by the Internaonal Accounng
Standards Board, and as adopted by the European Union
IgA
Immunoglobulin A
IgD Immunoglobulin D
IgG Immunoglobulin G
IgM Immunoglobulin M
IIP Immunology Innovaon Program
IL-22 interleukin-22
IL-22R interleukin-22 receptor
IMM irreversible morbidity or mortality
IMNM immune-mediated necrozing myopathy
INCAT Inammatory Neuropathy Cause and Treatment
IND invesgaonal new drug
IQVIA IQVIA LTD
IRB instuonal review board
ISTs
immunosuppressive therapies
ITP immune thrombocytopenic purpura
ITP immune thrombocytopenia
IV intravenous
IVIg intravenous IgG
Janssen Janssen Pharmaceucals, Inc.
JJDC Johnson & Johnson Innovaon – JJDC, Inc.
J-MAA Japanese Market Authorizaon Applicaon
JOBS Act the U.S. Jumpstart Our Business Startups Act of 2012
LEO Pharma Pharma LEO Pharma A/S
LN lupus nephris
Lonza Lonza Sales AG
LUMC Leiden University Medical Center
MAA markeng authorizaon applicaon
MAD mulple ascending dose
MAR
Regulaon (EU) No 596/2014 of the European Parliament and of the Council of April 2014
on market abuse (market abuse regulaon) and repealing Direcve 2003/6/EC European
Parliament and of the Council and Commission Direcves 2003/124/EC, 2003/EC and
2004/72/EC, and the rules and regulaons promulgated pursuant thereto
MDS myelodysplasc syndromes
Medison Medison Pharma Ltd.
Member State a member state of the EEA
MET mesenchymal-epithelial transion factor
MFN Most Favored Naon
MG myasthenia gravis
MHRA Medicines and Healthcare products Regulatory Agency
Minister Minister of Health, Labour and Welfare
MMN mulfocal motor neuropathy
MN membranous nephropathy
MuSK muscle-specic kinase
MSE minimal symptom expression
myosis idiopathic inammatory myopathies
Nasdaq the Nasdaq Global Select Market
NHI Naonal Health Insurance
NHSA Naonal Healthcare Security Administraon
NK natural killer
Novo
Novo Nordisk A/S
NRDL Naonal Reimbursable Drug List
OIG the Oce of Inspector General
OOPD the U.S. Oce of Orphan Products Development
Equity Incenve Plan
the equity incenve plan as adopted by our Board of Directors on December 18, 2014
which was approved by the General Meeng on May 13, 2015 and amended by the General
Meeng on April 28, 2016 and November 25, 2019 and the Board of Directors on December
18, 2019, November 5, 2020 and on December 15, 2021
PAA
pre-approval access program
PCT Patent Cooperaon Treaty
PD pharmacodynamic
PDAI pemphigus disease area index
PDUFA Prescripon Drug User Fee Act
PF pemphigus foliaceous
Pharmaceucal and Medical Device Act the Act on Securing Quality, Ecacy and Safety of Pharmaceucals and Medical Devices
PHSA the U.S. Public Health Service Act
PIP paediatric invesgaon plan
PK pharmacokinec
PMDA Pharmaceucals and Medical Devices Agency (Japan)
POTS
postural orthostac tachycardia syndrome
Prospectus Regulaon
Regulaon (Eu) 2017/1129 Of The European Parliament And Of The Council of 14 June on
the prospectus to be published when securies are oered to the public or admied trading
on a regulated market, and repealing Direcve 2003/71/EC
PREA Pediatric Research Equity Act of 2003, as amended
PRV
Priority Review Voucher
PV
pemphigus vulgaris
PVAS
pemphigus vulgaris acvity score
QMG quantave myasthenia gravis
RDL Reimburse Drug List
Registraon Document this universal registraon document
REMS risk evaluaon and migaon strategy
PART X
326 | Glossary Glossary | 327
328 | Glossary
Roche F. Homan-La Roche AG
RSUs Restricted stock units
SAD
single ascending dose
SC subcutaneous
SE regulaon
European Council Regulaon (EC) No 2157/2001 of October 8, 2001 on the Statute for a
European company (Societas Europaea or SE)
SEC
the U. S Securies and Exchange Commission
Secon 404 Secon 404 of the Sarbanes-Oxley Act of 2002
Securies Shares or American Depositary Receipts to Shares in the share capital of argenx SE
Securies Act the U.S. Securies Act of 1933, as amended
Shire Shire AG, now known as Shire Internaonal GmbH
SjS
Sjögren’s syndrome
SLE systemic lupus erythematosus
SMA spinal muscular atrophy
Sopartec Sopartec S.A.
SRD II
Direcve 2017/828 of the European Parliament and of the Council of May 17, as regards the
encouragement of long-term shareholder engagement
Staten
Staten Biotechnology B.V.
TEAE treatment emergent adverse events
Takeover Law the Belgian law dated April 1, 2007 on public takeover bids
Takeover Royal Decree the Belgian Royal Decree of April 27, 2007 on public takeover bids
T-cell T lymphocyte protecng the body from infecon
TCL
T-cell lymphoma
TGF-β transforming growth factor beta
Transparency Direcve
Direcve 2004/109/EC of the European Parliament and of the Council of December 15, 2004
on the harmonizaon of transparency requirements in relaon to informaon about issuers
whose securies are admied to trading on a regulated market and amending Direcve
2001/34/EC and the rules and regulaons promulgated pursuant thereto, as amended by
various direcves including 2013/50/EU
Tregs T-cell populaon modulang the immune system
U.S. the United States of America
UCL Université Catholique de Louvain
UK the United Kingdom
UoT the University of Texas System
USPTO the United States Patent and Trademark Oce
VIB VIB vzw
V-regions anbody variable regions
we, us or our
argenx SE together with its wholly owned subsidiaries argenx IIP BV, argenx BV, argenx US
Inc, argenx Japan K.K., and argenx Switzerland SA, argenx France SAS and argenx Germany
GmbH and, as applicable, its former wholly owned subsidiaries
Zai Lab Zai Lab Limited
