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argenx (ARGX) to Regain AML Candidate After J&J's Dismissal

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argenx (ARGX - Free Report) announced that it will regain worldwide rights to its anti-CD70 antibody candidate, cusatuzumab, following J&J’s (JNJ - Free Report) decision to discontinue the development agreement of the candidate.

Please note that argenx and J&J’s subsidiary, Cilag GmbH International, had signed a collaboration and license agreement in 2018 to develop cusatuzumab as a potential treatment for acute myeloid leukemia (AML) and myelodysplastic syndromes.

Shares of argenx declined almost 3.6% on Jun 7 following the announcement. Shares of the company have declined 11.5% so far this year compared with the industry’s decrease of 4%.

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The companies are evaluating the candidate in a phase Ib study — ELEVATE — in combination with AbbVie (ABBV - Free Report) /Roche’s (RHHBY - Free Report) Venclexta (venetoclax) and Bristol-Myers’ Vidaza (azacitidine) for treating newly-diagnosed, elderly patients with AML. However, upon reviewing all available data on cusatuzumab and evolving standard of care for the treatment of AML, J&J decided not to be part of cusatuzumab development program. Although J&J did not specify any particular reason, it can be assumed that the company did not see significant potential opportunity for the candidate going forward.

However, argenx believes the candidate could be meaningful to AML patients based on interim data from the ELEVATE study.

Interim data from ELEVATE study showed that cusatuzumab achieved an objective response rate of 93% with complete remission in 48% of the evaluable patient population. Complete results from the study will be presented in an upcoming peer-reviewed forum.

Moreover, data from ongoing phase II study — CULTIVATE — evaluating cusatuzumab in combination with Vidaza also demonstrated potential of the candidate as AML treatment.

Meanwhile, J&J may operationally support the treatment and follow-up of patients enrolled in ongoing cusatuzumab studies following the termination of the agreement, if argenx elects.

We note that though the loss of J&J’s partnership is a setback for the company, argenx is primarily focused on launch of its lead pipeline candidate, efgartigimod. The company’s regulatory application seeking approval for efgartigimod as potential treatment for debilitating neuromuscular disease, generalized myasthenia gravis, is under review with the FDA. A decision is expected by Dec 17, 2021.

Apart from myasthenia gravis, the company is evaluating intravenous and subcutaneous formulation of efgartigimod in two separate phase III studies in patients with immune thrombocytopenia. It is also developing the candidate for treating chronic demyelinating polyneuropathy and pemphigus vulgaris.

Zacks Rank

argenx currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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