A perfect storm costs Argenx 4 billion euros in market value

March 05, 2021


Since its peak in February, biotech star Argenx has lost a quarter of its market value. Investors are responding in delayed relays to a US setback for goldcrest efgartigimod, with rising interest rates as an additional scourge.

Feel free to call it one triple whammy that Argenx is going through this week. The promising biotech company is facing setbacks from three different directions. Tuesday came to light that the US drug watchdog FDA is not granting an urgent procedure to efgartimod for the treatment of the muscle disease myasthenia gravis. As a result, US approval for Argenx’s lead agent is expected in December at the earliest. CEO Tim Van Hauwermeiren attributes this delay to force: the FDA has been killed by the pandemic and is delayed.

While the potential of efgartigimod is not questioned, it does weigh on psychology. Investors only got a hangover when Galapagos, a company with which Argenx is often measured, his American dream.

Finally and not least there is the effect of the interest. The rising long-term interest rates are weighing on all companies whose (billions of) valuation is based on cash flow that still has to be earned in the coming years. Argenx is a typical example of this. Even a small interest rate hike – opposite the zero interest rate of 2020 – can then have a major impact if investors recalculate that hoped-for future cash flow to the present.


That perfect storm results in a good breather for the popular stock. Argenx lost 23 percent of its value in three weeks. It saw its stock market value decrease from 16 billion euros to 12 billion euros during that period.

A breather was welcome after the steep climb.

“A breather was welcome anyway after the steep climb,” argue analysts. Overall, they remain confident in the potential of efgartigimod, which is not only effective for the muscle disease myasthenia gravis, but also has three other areas of application in blood, skin and nervous diseases. Argenx still does not count any sales advice and has seven ‘buy’ advice and four ‘hold’ advice.

“But we see few catalysts for the price in the short term,” Kepler Cheuvreux wrote in a report on Friday. The stock exchange still remembers potential jammers for the rollout of efgartimod from a conference call with Van Hauwermeiren. “It will take time to train physicians to explain efgartigimod’s completely new mechanism of action,” says Kepler. “In addition, the drug will not be eligible for reimbursement at the time of launch.”

© Dieter Telemans

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