argenx SE (NASDAQ:ARGX) Q3 2020 Earnings Conference Call October 22, 2020 8:30 AM ET Company Participants Beth DelGiacco - Vice President, Investor Relations Tim Van Hauwermeiren - Chief Executive Officer Keith Woods - Chief Operating Officer Eric Castaldi - Chief Financial Officer Conference Call Participants Yatin Suneja - Guggenheim Yaron Werber - Cowen Tazeen Ahmad - Bank of America Merrill Lynch Derek Archila - Stifel Nicolaus David Nierengarten - Wedbush Securities Akash Tewari - Wolfe Research Joon L ...

Efgartigimod (IV/SC) Clinical Trial Results & Regulatory Progress - In AChR-Ab+ patients, 84.1% of MG-ADL responders (37/44) had onset of effect in the first two weeks[10] - 40% of Efgartigimod patients achieved minimal symptom expression compared to 11% in placebo[13] - Across cycles 1 and 2, 78.5% (51/65) of efgartigimod patients were MG-ADL responders[22] - 36.8% (7/19) of efgartigimod patients who were not MG-ADL responders in cycle 1 and were retreated achieved MG-ADL responder for the first time in cycle 2[24] - In the overall population, 67.9% of efgartigimod patients were MG-ADL responders compared to 37.3% of placebo patients[26] - BLA filing for IV Efgartigimod is expected by the end of 2020, and J-MAA filing expected in 1H21[29, 55] Pipeline Development - Phase 3 trial for SC Efgartigimod in PV is planned to start in 4Q20[29] - Topline data for Cusatuzumab + AZA in newly diagnosed AML (unfit) is expected in early 2021[29, 39] Financial Results - The company's cash, cash equivalents, and current financial assets at the end of the period were €1,804,043 thousand[58] - The net loss for the period was €363,296 thousand[58]

argenx SE (NASDAQ:ARGX) Q2 2020 Earnings Conference Call July 30, 2020 8:30 AM ET Company Participants Beth DelGiacco - Vice President, Investor Relations Tim Van Hauwermeiren - Chief Executive Officer Keith Woods - Chief Operating Officer Eric Castaldi - Chief Financial Officer Conference Call Participants Yaron Werber - Cowen Yatin Suneja - Guggenheim Jason Butler - JMP Securities Max Skor - Morgan Stanley Joon Lee - SunTrust Robinson Humphrey Tazeen Ahmad - Bank of America Merrill Lynch Graig Suvannavejh ...

argenx SE (NASDAQ:ARGX) Q1 2020 Earnings Conference Call May 14, 2020 9:00 AM ET Company Participants Beth DelGiacco - Vice President, Investor Relations Tim Van Hauwermeiren - Chief Executive Officer Keith Woods - Chief Operating Officer Eric Castaldi - Chief Financial Officer Conference Call Participants Ted Tenthoff - Piper Sandler Christopher Marai - Nomura Tiago Fauth - Crédit Suisse Graig Suvannavejh - Goldman Sachs Akash Tewari - Wolfe Research Derek Archila – Stifel Max Skor - Morgan Stanley James G ...

[PART I](index=5&type=section&id=PART%20I) [Key Information](index=6&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section provides a five-year summary of the company's key financial data, showing significant revenue growth, increasing operating losses, and rising R&D expenses [Selected Financial Data](index=6&type=section&id=3.A.%20SELECTED%20FINANCIAL%20DATA) The company's five-year financial data shows significant revenue growth, increasing operating losses, and substantial asset expansion driven by financing activities Consolidated Statement of Profit and Loss | Indicator | 2019 (€ thousands) | 2018 (€ thousands) | 2017 (€ thousands) | 2016 (€ thousands) | 2015 (€ thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 69,783 | 21,482 | 36,415 | 14,713 | 6,854 | | **Research and development expenses** | (197,665) | (83,609) | (51,740) | (31,557) | (20,635) | | **Operating loss** | (178,554) | (81,849) | (22,932) | (21,416) | (15,605) | | **Loss for the year** | (162,965) | (66,641) | (28,076) | (21,374) | (15,312) | | **Basic and diluted loss per share** | (4.22) | (1.99) | (1.14) | (1.14) | (0.97) | Condensed Consolidated Statement of Financial Position | Indicator | As of Dec 31, 2019 (€ thousands) | As of Dec 31, 2018 (€ thousands) | As of Dec 31, 2017 (€ thousands) | As of Dec 31, 2016 (€ thousands) | As of Dec 31, 2015 (€ thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Cash, cash equivalents and current financial assets** | 1,335,821 | 564,569 | 359,775 | 96,728 | 42,327 | | **Total assets** | 1,433,339 | 578,458 | 370,908 | 105,772 | 45,962 | | **Total equity** | 1,050,746 | 538,395 | 344,931 | 63,374 | 37,278 | [Risk Factors](index=7&type=section&id=3.D.%20RISK%20FACTORS) The company faces significant financial, developmental, commercialization, intellectual property, and foreign private issuer risks - The company is a clinical-stage biopharmaceutical firm with a history of significant operating losses, reporting a total comprehensive loss of **€163.0 million** for the year ended December 31, 2019, and accumulated losses of **€332.6 million** as of that date[20](index=20&type=chunk) - Future expenses are expected to increase substantially due to the execution of Phase 3 trials for efgartigimod, Phase 2 trials for cusatuzumab, and the continued development of other candidates, along with building commercial infrastructure[22](index=22&type=chunk) - The company's product candidates are in preclinical or clinical development, a process that is lengthy, expensive, and has an uncertain outcome; delays in clinical trials could prevent or postpone regulatory approvals and commercialization[37](index=37&type=chunk) - The COVID-19 pandemic poses a risk of disrupting clinical trials and preclinical studies by impairing patient recruitment, affecting third-party CROs, and causing delays in the supply of product candidates[75](index=75&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) - The company faces significant competition in both autoimmune and oncology fields from large pharmaceutical companies with greater resources; key competitors for its FcRn-targeting product include UCB, Momenta, Alexion, and Immunovant[69](index=69&type=chunk) - As a foreign private issuer, the company is exempt from certain U.S. SEC reporting and governance requirements, such as U.S. proxy rules and filing quarterly reports on Form 10-Q, which may result in fewer protections for shareholders compared to U.S. domestic companies[323](index=323&type=chunk)[324](index=324&type=chunk) [Information on the Company](index=65&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) This section details the company's history, business operations, organizational structure, and properties, outlining its strategy to become a global immunology company [History and Development of the Company](index=65&type=section&id=4.A.%20HISTORY%20AND%20DEVELOPMENT%20OF%20THE%20COMPANY) argenx SE, incorporated in 2008, restructured its intellectual property to Belgium in 2017, incurring a tax liability but creating significant tax-deductible costs Capital Expenditures | Year | Amount (€ millions) | | :--- | :--- | | 2017 | 0.4 | | 2018 | 0.7 | | 2019 | 41.7 | - In May 2017, the company restructured by transferring legal ownership of all intellectual property rights from argenx SE (Netherlands) to its Belgian subsidiary, argenx BV, retroactive to January 1, 2017, to align IP ownership with the location of R&D activities[343](index=343&type=chunk) - The restructuring involved an **€80 million** indemnification payment from the Belgian subsidiary to the Dutch parent company, resulting in a **€2.4 million** tax liability for argenx SE in the Netherlands but creating up to **€80 million** in tax-deductible costs for argenx BV in Belgium[344](index=344&type=chunk)[347](index=347&type=chunk) [Business Overview](index=67&type=section&id=4.B.%20BUSINESS%20OVERVIEW) argenx is a clinical-stage biotech company focused on antibody therapies for autoimmune diseases and cancer, aiming for global immunology leadership by 2021 - The company's 'argenx 2021' vision is to become a global, fully integrated immunology company, with the potential U.S. launch of its first product, efgartigimod, in 2021[348](index=348&type=chunk) - The lead product candidate, efgartigimod (ARGX-113), is in a Phase 3 trial (ADAPT) for myasthenia gravis (MG), with topline data expected in mid-2020, and is also in a Phase 3 trial (ADVANCE) for immune thrombocytopenia (ITP)[350](index=350&type=chunk)[352](index=352&type=chunk) - The second lead product, cusatuzumab (ARGX-110), is being co-developed with Janssen for acute myeloid leukemia (AML) and high-risk myelodysplastic syndrome (MDS), with a registration-directed Phase 2 trial (CULMINATE) initiated in July 2019[357](index=357&type=chunk) - The company has a strategic collaboration with Janssen for cusatuzumab, which included a **$300 million** upfront payment and a **$197.2 million** equity investment from Johnson & Johnson Innovation Inc. in January 2019[358](index=358&type=chunk) - The company utilizes third-party contract manufacturers, primarily Lonza, for the cGMP manufacture of its drug substances and products[529](index=529&type=chunk) [Organizational Structure](index=133&type=section&id=4.C.%20ORGANIZATIONAL%20STRUCTURE) As of December 31, 2019, argenx SE operates with three wholly-owned subsidiaries in Belgium, the U.S., and Japan, focusing on research and pharmaceutical distribution Principal Subsidiaries as of December 31, 2019 | Company | Country of Incorporation | Ownership Interest | Main Activity | | :--- | :--- | :--- | :--- | | argenx BV | Belgium | 100.00% | Biotechnical research on drugs and pharma processes | | argenx US, Inc. | United States | 100.00% | Pharmaceuticals and pharmacy supplies merchant wholesalers | | argenx Japan KK | Japan | 100.00% | Pharmaceuticals and pharmacy supplies merchant wholesalers | [Property, Plants and Equipment](index=134&type=section&id=4.D.%20PROPERTY%2C%20PLANTS%20AND%20EQUIPMENT) The company leases all its facilities, including a primary operational and laboratory space in Belgium and offices in the Netherlands, U.S., and Japan Leased Facilities as of December 31, 2019 | Facility Location | Use | Approx. Size (m²) | Lease Expiry | | :--- | :--- | :--- | :--- | | Zwijnaarde, Belgium | Operations and Laboratory Space | 2,900 | March 31, 2025 | | Breda, the Netherlands | Headquarters | 12 | July 31, 2020 | | Boston, Massachusetts | Office Space | 813 | August 31, 2025 | | Tokyo, Japan | Office Space | 50 | January 31, 2020 | [Operating and Financial Review and Prospects](index=134&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section provides management's discussion and analysis of the company's financial condition and results of operations, detailing revenue, expense, and liquidity changes [Operating Results](index=134&type=section&id=5.A.%20OPERATING%20RESULTS) Total operating income increased significantly in 2019 due to collaborations, but rising R&D and SG&A expenses led to a substantial increase in operating loss Comparison of Years Ended December 31, 2019 and 2018 | Item | 2019 (€ thousands) | 2018 (€ thousands) | % Change | | :--- | :--- | :--- | :--- | | **Total operating income** | 82,584 | 29,231 | 183% | | **Research and development expenses** | (197,665) | (83,609) | 136% | | **Selling, general and administrative expenses** | (64,569) | (27,471) | 135% | | **Operating loss** | (178,554) | (81,849) | 118% | | **Loss for the period** | (162,965) | (66,641) | 145% | - Revenue increased by **225%** to **€69.8 million** in 2019, primarily due to the partial recognition of the upfront payment from the Janssen collaboration and a milestone payment from the AbbVie collaboration[767](index=767&type=chunk)[768](index=768&type=chunk)[769](index=769&type=chunk) - External R&D expenses for efgartigimod increased by **172%** to **€84.2 million** in 2019, driven by Phase 3 trials in MG and ITP and Phase 2 trials in CIDP and PV[776](index=776&type=chunk) - External R&D expenses for cusatuzumab increased by **317%** to **€38.7 million** in 2019, mainly due to the initiation of a Phase 2 trial as part of the Janssen collaboration[776](index=776&type=chunk)[777](index=777&type=chunk) [Liquidity and Capital Resources](index=145&type=section&id=5.B.%20LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Cash and equivalents significantly increased to €1.34 billion in 2019, driven by operating cash flow and financing activities, ensuring liquidity for the next 12 months Cash Flow Summary | Cash Flow Activity | 2019 (€ thousands) | 2018 (€ thousands) | | :--- | :--- | :--- | | Net cash from operating activities | 134,584 | (53,839) | | Net cash used in investing activities | (744,338) | (107,542) | | Net cash from financing activities | 659,359 | 244,671 | | **Cash and cash equivalents at end of period** | **331,282** | **281,040** | - As of December 31, 2019, the company held **€1,335.8 million** in cash, cash equivalents, and current financial assets[783](index=783&type=chunk) - Financing activities in 2019 provided **€659.4 million**, primarily from a **€479.2 million** global offering in November and a **€176.7 million** private placement related to the Janssen collaboration[791](index=791&type=chunk) [Tabular Disclosure of Contractual Obligations](index=148&type=section&id=5.F.%20TABULAR%20DISCLOSURE%20OF%20CONTRACTUAL%20OBLIGATIONS) As of December 31, 2019, total contractual obligations were €98.4 million, primarily comprising lease liabilities and purchase obligations with manufacturing contractors Contractual Obligations as of December 31, 2019 | Obligation Type | Total (€ thousands) | Less than 1 year (€ thousands) | 1–3 years (€ thousands) | 3–5 years (€ thousands) | More than 5 years (€ thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Lease liabilities | 7,025 | 2,205 | 3,137 | 1,251 | 432 | | Purchase obligations | 91,409 | 52,032 | 32,790 | 4,001 | 2,586 | - The company has a commercial supply agreement with Lonza for efgartigimod with a minimum commitment of **£25.3 million** over five years starting in 2020; total outstanding commitments for efgartigimod are approximately **€53.4 million**, with additional commitments of **€34.4 million** for cusatuzumab and **€3.6 million** for ARGX-117[803](index=803&type=chunk)[805](index=805&type=chunk) [Directors, Senior Management, and Employees](index=149&type=section&id=ITEM%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%2C%20AND%20EMPLOYEES) This section details the company's leadership and workforce, including board composition, executive management, compensation structures, committee roles, and employee growth [Directors and Senior Management](index=149&type=section&id=6.A.%20DIRECTORS%20AND%20SENIOR%20MANAGEMENT) The company operates with a one-tier board, including one executive and seven independent non-executive directors, supported by an experienced executive management team - The Board of Directors consists of one executive director (CEO Tim Van Hauwermeiren) and seven non-executive directors; all non-executive directors are considered independent under Nasdaq listing requirements and the Dutch Corporate Governance Code[807](index=807&type=chunk)[809](index=809&type=chunk) [Compensation](index=153&type=section&id=6.B.%20COMPENSATION) Executive compensation includes base salary, annual bonuses, and long-term stock options, with the CEO's total compensation reaching €6.15 million in 2019 CEO Compensation (2019) | Component | Compensation (€) | | :--- | :--- | | Base salary | 525,000 | | Option awards | 5,257,360 | | Non-equity incentive plan compensation | 326,288 | | Other | 33,110 | | **Total** | **6,152,325** | Aggregate Executive Management Compensation (excluding CEO) (2019) | Component | Compensation (€) | | :--- | :--- | | Base salary | 2,002,255 | | Option awards | 16,589,721 | | Employer social security contribution stock options | 9,160,263 | | Non-equity incentive plan compensation | 648,999 | | **Total** | **29,905,992** | - The Employee Stock Option Plan allows for the issuance of options up to **14.5%** of the company's fully-diluted share capital; as of March 16, 2020, **4,250,535** options were outstanding, representing approximately **9.9%** of total voting financial instruments[859](index=859&type=chunk)[862](index=862&type=chunk) [Board Practices](index=163&type=section&id=6.C.%20BOARD%20PRACTICES) The board, composed of independent non-executive directors, oversees risk management through established committees including Audit, Remuneration, R&D, and Commercial - The Board of Directors has established four committees: Audit, Remuneration and Nomination, Research and Development, and Commercial; all members of these committees are non-executive directors determined to be independent[878](index=878&type=chunk)[881](index=881&type=chunk)[889](index=889&type=chunk)[894](index=894&type=chunk) - The Audit Committee is chaired by Werner Lanthaler, who qualifies as an "audit committee financial expert"; its responsibilities include overseeing financial reporting, internal controls, and the relationship with external auditors[880](index=880&type=chunk)[881](index=881&type=chunk)[883](index=883&type=chunk) [Employees](index=169&type=section&id=6.D.%20EMPLOYEES) Employee headcount significantly increased to 188 in 2019, with growth across R&D and SG&A functions, primarily based in Belgium and the USA Employee Headcount by Function and Year-End | Function | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Research and development | 118 | 75 | 58 | | Selling, general and administrative | 70 | 30 | 15 | | **Total** | **188** | **105** | **73** | [Major Shareholders and Related Party Transactions](index=170&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section identifies the company's major shareholders and details related party transactions, including executive compensation and indemnification agreements [Major Shareholders](index=170&type=section&id=7.A.%20MAJOR%20SHAREHOLDERS) As of March 16, 2020, FMR LLC and T. Rowe Price Group, Inc. are the largest shareholders, with directors and executive management collectively owning 2.96% Major Shareholders (3% or Greater) as of March 16, 2020 | Shareholder | Percentage Owned | | :--- | :--- | | FMR LLC | 9.99% | | T. Rowe Price Group, Inc. | 9.54% | | Entities affiliated with Baker Bros. | 5.28% | | Wellington Management Group LLP | 5.04% | | Federated Investors, Inc. | 4.43% | | Johnson & Johnson Innovation - JJDC, Inc | 4.13% | | RTW Investments | 3.36% | | The Vanguard Group | 3.31% | | Baillie Gifford & Co. | 3.27% | | Blackrock, Inc. | 3.02% | - All directors and executive management as a group (14 persons) beneficially owned **1,300,885 shares**, representing **2.96%** of the total outstanding ordinary shares as of March 16, 2020[916](index=916&type=chunk) [Related Party Transactions](index=174&type=section&id=7.B.%20RELATED%20PARTY%20TRANSACTIONS) The company has management and employment agreements with executives, including compensation and severance terms, and indemnification agreements with directors and management - The CEO's management agreement includes a base salary of **€525,000** and a cash bonus potential of up to **55%** of base salary; the company may terminate the agreement with 18 months' notice or an equivalent payment in lieu of notice[939](index=939&type=chunk)[940](index=940&type=chunk) - Key executives such as the CFO, COO, CMO, CSO, and General Counsel have employment contracts that may be terminated by the company subject to a notice period and a severance payment of at least 12 months[942](index=942&type=chunk)[943](index=943&type=chunk)[944](index=944&type=chunk)[945](index=945&type=chunk)[947](index=947&type=chunk) - The company entered into indemnification agreements with all non-executive directors and members of its executive management in connection with its initial U.S. public offering[948](index=948&type=chunk) [Financial Information](index=176&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) The company has not paid cash dividends and plans to reinvest earnings, with future payments subject to shareholder approval and Dutch legal requirements - The company has not paid any cash dividends since its incorporation and does not plan to in the foreseeable future, intending to reinvest earnings to support business growth[956](index=956&type=chunk) - The company is not currently a party to any legal, governmental, or arbitration proceedings that could have a significant adverse impact[955](index=955&type=chunk) [Additional Information](index=177&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section covers supplementary corporate and legal information, including Dutch exchange controls and a detailed analysis of U.S., Dutch, and Belgian tax consequences for ADS holders [Taxation](index=178&type=section&id=10.E.%20TAXATION) This subsection details U.S., Dutch, and Belgian tax implications for ADS holders, including dividend withholding taxes and potential PFIC status for U.S. investors - For U.S. holders, the company does not anticipate being treated as a Passive Foreign Investment Company (PFIC) for the 2019 taxable year, but this is a factual determination made annually and is subject to change[337](index=337&type=chunk)[985](index=985&type=chunk) - The Netherlands imposes a **15%** dividend withholding tax; however, U.S. resident holders eligible for benefits under the U.S.-Netherlands tax treaty may qualify for a reduced rate (e.g., **5%** for certain corporate shareholders) or a full exemption (e.g., for certain pension funds)[1005](index=1005&type=chunk)[1013](index=1013&type=chunk) - A Belgian withholding tax of **30%** is typically levied on dividends paid through a Belgian intermediary; relief may be available under applicable domestic or tax treaty provisions[1071](index=1071&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=202&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risk is foreign exchange, arising from multi-currency transactions and USD cash holdings, with minimal interest rate risk - The company's primary market risk is foreign exchange risk, stemming from transactions in USD, CHF, GBP, and JPY, and holding significant cash and financial assets in USD[1121](index=1121&type=chunk)[1122](index=1122&type=chunk) - Interest rate risk is not considered significant because interest-bearing assets are primarily short-term cash deposits[1120](index=1120&type=chunk) [Description of Securities Other Than Equity Securities](index=203&type=section&id=ITEM%2012.%20DESCRIPTION%20OF%20SECURITIES%20OTHER%20THAN%20EQUITY%20SECURITIES) This section outlines the terms of American Depositary Shares (ADSs), including their representation of ordinary shares, governing deposit agreement, and associated fees ADS Holder Fees and Charges | Fee | For | | :--- | :--- | | $5.00 (or less) per 100 ADSs | Issuance or cancellation of ADSs | | $0.05 (or less) per ADS | Any cash distribution | | $0.05 (or less) per ADS per calendar year | Depositary services | | Registration or transfer fees | Transfer of shares on the company's register | | Expenses of the depositary | Cable, currency conversion, etc. | [PART II](index=206&type=section&id=PART%20II) [Controls and Procedures](index=206&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) Management confirmed effective disclosure controls and internal control over financial reporting as of December 31, 2019, remediating a prior material weakness - Management concluded that as of December 31, 2019, the company's disclosure controls and procedures were effective[1134](index=1134&type=chunk) - Management assessed internal control over financial reporting as effective as of December 31, 2019, based on the COSO 2013 framework; this assessment was audited by Deloitte Accountants B.V., which also issued an unqualified opinion[1139](index=1139&type=chunk)[1140](index=1140&type=chunk) - The company successfully remediated the material weakness in internal control over financial reporting that was identified as of December 31, 2018; remediation actions included hiring an Internal Controls Manager and implementing enhanced IT controls[1146](index=1146&type=chunk)[1147](index=1147&type=chunk) [Audit Committee Financial Expert](index=208&type=section&id=ITEM%2016A.%20AUDIT%20COMMITTEE%20FINANCIAL%20EXPERT) Dr. Werner Lanthaler has been designated as the independent audit committee financial expert, as defined by SEC rules - The Board of Directors has identified Werner Lanthaler as the audit committee financial expert[1150](index=1150&type=chunk) [Principal Accountant Fees and Services](index=209&type=section&id=ITEM%2016C.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) Deloitte Accountants B.V. billed €889,000 in total fees for 2019, primarily for audit and audit-related services, with all services pre-approved by the audit committee Accountant Fees | Fee Type | 2019 (€ thousands) | 2018 (€ thousands) | | :--- | :--- | :--- | | Audit Fees | 730 | 648 | | Audit-Related Fees | 159 | 143 | | Tax Fees | — | — | | All Other Fees | — | — | | **Total** | **889** | **791** | [Corporate Governance](index=210&type=section&id=ITEM%2016G.%20CORPORATE%20GOVERNANCE) As a foreign private issuer, the company follows Dutch corporate governance practices, differing from Nasdaq rules in areas like quorum, committee structure, and shareholder approvals - The company relies on home country governance practices, which differ from Nasdaq rules in several key areas, including quorum requirements, committee structure, and shareholder approval for certain actions[1160](index=1160&type=chunk) - Specific exemptions from Nasdaq rules include: no generally applicable quorum for shareholder meetings, combining the nomination and compensation committees, and not requiring shareholder approval for certain security issuances related to acquisitions or equity plans[1162](index=1162&type=chunk)[1163](index=1163&type=chunk)[1166](index=1166&type=chunk) [PART III](index=212&type=section&id=PART%20III) [Financial Statements](index=212&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section presents the company's audited consolidated financial statements for 2017-2019, prepared under IFRS, including the independent auditor's unqualified opinion - The independent auditor's report expresses an unqualified opinion on the financial statements and on the effectiveness of the company's internal control over financial reporting as of December 31, 2019[1179](index=1179&type=chunk)[1180](index=1180&type=chunk) - A critical audit matter identified was the revenue recognition and deferred revenue related to the global collaboration and license agreement with Janssen, specifically the judgment involved in determining it as a single performance obligation[1185](index=1185&type=chunk)[1189](index=1189&type=chunk) - Another critical audit matter was the estimation of research and development cost accruals, due to the subjectivity in evaluating the progress of numerous ongoing clinical trial activities[1192](index=1192&type=chunk)[1194](index=1194&type=chunk) [Exhibits](index=212&type=section&id=ITEM%2019.%20EXHIBITS) This section lists all exhibits filed with the annual report, including corporate documents, material contracts, and CEO/CFO certifications - The report includes key corporate documents such as the Articles of Association (Exhibit 1.1) and the ADS Deposit Agreement (Exhibit 2.1)[1172](index=1172&type=chunk) - Material contracts filed as exhibits include the collaboration and license agreement with Janssen (Exhibit 4.5) and the related investment agreement (Exhibit 4.6)[1172](index=1172&type=chunk)

Financial Data and Key Metrics Changes - Total operating income for 2019 reached €82.6 million, an increase of €53.4 million compared to 2018, attributed to collaboration with Janssen and milestone payments from AbbVie [31] - Total expenses for 2019 were €197.7 million, up from €83.6 million in 2018, driven by increased R&D and SG&A expenditures [32] - The net loss for 2019 was €163 million, compared to €66.6 million in 2018, with cash equivalents increasing to €1.3 billion from €565 million in 2018 [33] Business Line Data and Key Metrics Changes - The company is advancing its pipeline with multiple trials ongoing for efgartigimod in various indications, including myasthenia gravis (MG), immune thrombocytopenia (ITP), pemphigus vulgaris (PV), and chronic inflammatory demyelinating polyneuropathy (CIDP) [6][12] - The Phase III ADAPT trial for MG is fully enrolled, with top-line data expected mid-year [20][21] Market Data and Key Metrics Changes - The company has received fast-track designation from the FDA for efgartigimod in MG, indicating potential for expedited review and market entry [6][7] - The company is preparing for a commercial launch in 2021, with a focus on building a global commercial team [28][30] Company Strategy and Development Direction - The company aims to become a fully integrated immunology company by 2021, focusing on innovation across its pipeline and commercial strategies [6][8] - The strategy includes a patient-tailored dosing regimen for efgartigimod, differentiating it from competitors who may use fixed dosing [26][78] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential of efgartigimod, highlighting its unique mechanism of action and the importance of addressing the underlying causes of diseases like MG [26][72] - The company is optimistic about its pipeline and expects to run up to five Phase III trials and seven earlier-stage clinical trials in 2020 [34] Other Important Information - The company has initiated a real-world evidence initiative called "my real-world MG" to better understand patient perspectives and the burden of MG [27][86] - The company plans to engage with the FDA regarding the subcutaneous formulation of efgartigimod, aiming for a streamlined approval process [76] Q&A Session Summary Question: Thoughts on competitor's decision to halt an antibody program - Management noted that not all FcRn programs are equal, emphasizing the differentiation in efficacy, safety, and convenience of their product [38][39] Question: Details on mid-year data release - Management stated that mid-year is the best guidance they can provide at this time [40] Question: Patient stratification in Phase III ADAPT trial - The trial has been stratified based on geographic location, receptor positivity, and background therapies to ensure balanced results [42][43] Question: Steroid doses normalization in the trial - Steroid doses are comparable to those seen in Phase II trials, with top-line data to be released first, followed by more detailed information [44] Question: Treatment burden and subcutaneous options - Management clarified that the treatment can be administered via home infusion, and they are exploring options for subcutaneous administration to enhance patient convenience [47][48] Question: Criteria for redosing in Phase III - Patients need to lose their clinically meaningful response, defined as a two-point change from baseline, to qualify for redosing [56] Question: Update on CIDP trial enrollment - No public updates on CIDP trial enrollment have been provided yet [69] Question: FDA's perspective on ADAPT trial endpoints - Management confirmed that the primary endpoint has been discussed with the FDA, and they are focused on the clinical meaningfulness of the results [72] Question: Synergy between cusatuzumab and venetoclax - Preclinical data suggests a strong synergy between cusatuzumab and venetoclax, which could enhance treatment efficacy in AML [84]

Revenue and Income - Total revenue for the year ended December 31, 2018, decreased by €14.9 million to €21.5 million, a 41% decline compared to €36.4 million in 2017[811]. - Total operating income for 2018 was €29.2 million, a 29% decrease from €41.3 million in 2017[810]. - The company reported a total comprehensive loss of €66.6 million for 2018, a 137% increase from €28.1 million in 2017[810]. - Loss before taxes for 2018 was €65.8 million, a 140% increase from €27.5 million in 2017[810]. - The company had accumulated losses of €169.6 million as of December 31, 2018, and expects to continue incurring significant operating losses in the foreseeable future[863]. Expenses - Research and development expenses totaled €83.6 million for the year ended December 31, 2018, a 62% increase from €51.7 million in 2017, driven by higher external research and personnel expenses[818]. - Selling, general and administrative expenses increased to €27.5 million in 2018, a 121% rise from €12.4 million in 2017, mainly due to higher personnel and consulting fees[822]. - Personnel expenses in research and development increased by €10.0 million in 2018, largely due to share-based compensation and additional personnel costs[818]. - Upfront payments decreased by 57% to €8.6 million in 2018 from €20.1 million in 2017, primarily due to the completion of preclinical activities under collaborations with LEO Pharma and AbbVie[811][812]. - Research and development service fees decreased by €5.2 million, or 79%, to €1.4 million in 2018 compared to €6.6 million in 2017, linked to the completion of preclinical activities[811][815]. Research and Development - External research and development expenses rose to €48.9 million in 2018, up 75% from €27.9 million in 2017, primarily due to increased clinical trial costs[820]. - The lead product candidate efgartigimod incurred external research and development expenses of €30.9 million in 2018, a 150% increase from €12.4 million in 2017[820]. - The company employed 75 research and development personnel as of December 31, 2018, compared to 58 employees in 2017, indicating a significant increase in workforce[818]. Financial Position - Cash and cash equivalents at the end of the period increased to €281.0 million in 2018 from €190.9 million in 2017, a rise of €90.2 million[852]. - Net cash used in operating activities increased to €53.8 million in 2018, up €17.3 million from €36.5 million in 2017[852]. - The net cash inflow from financing activities was €244.7 million for the year ended December 31, 2018, compared to €305.4 million in 2017[856]. - The company expects existing cash and cash equivalents to fund operating expenses and capital expenditure requirements for at least the next 12 months[864]. Commitments and Obligations - The total commitment under the commercial supply agreement with Lonza for efgartigimod amounts to a minimum of £25.3 million over a period of five years starting from 2020[873]. - The company has outstanding commitments for efgartigimod of approximately €42.2 million and for cusatuzumab of approximately €4.5 million starting from 2019[873]. - The operating lease commitments total €3,004,000, with €1,028,000 due within one year[869]. - The purchase obligation amounts to €46,626,000, with €13,610,000 due within one year[869]. Other Financial Information - Financial income for 2018 amounted to €3.7 million, up from €1.3 million in 2017, reflecting a €2.4 million increase primarily from higher interest on cash and equivalents[826]. - Exchange gains totaled €12.3 million for the year ended December 31, 2018, attributed to favorable fluctuations in the EUR/USD exchange rate[827]. - The company has no off-balance sheet arrangements as defined by SEC regulations[867]. - The company is unable to estimate the amounts of increased operating expenses associated with completing the research and development of its product candidates due to numerous risks and uncertainties[864].