On Tuesday, H.C. Wainwright analyst Douglas Tsao increased the price target for argenx SE (NASDAQ:ARGX) to $717 from $670, while reiterating a Buy rating on the company's shares. The stock, currently trading at $672.20 with a market cap of $40.59 billion, has shown remarkable strength with a 79.41% return over the past year. The revised price target is based on a 9x multiple of the firm's 2035 discounted risk-adjusted revenue estimate of $4.86 billion.
According to InvestingPro analysis, the stock is currently trading above its Fair Value, with 13 additional exclusive insights available to subscribers. Tsao's valuation takes into account the probabilities of success for various pipeline assets, with different rates assigned according to their stages of development and clinical data.
The analyst's confidence in argenx is partly due to the company's lead asset, efgartigimod, which has been assigned a 100% probability of success for myasthenia gravis (MG) and chronic inflammatory demyelinating polyneuropathy (CIDP), as well as 50% for immune thrombocytopenia (ITP), 65% for myositis, 70% for thyroid eye disease (TED), and 70% for Sjögren's syndrome (SS). The anti-FcRn mechanism of efgartigimod has been validated and the treatment is now available in over 30 countries for MG.
Other assets in the pipeline include ARGX-117, which is given a 70% probability of success following early efficacy signals in the ARDA study, and ARGX-116 and ARGX-119, which are in earlier stages of development and have been assigned probabilities of 25% and 30%, respectively. These assessments are made considering the current progress and data from ongoing clinical trials.
Tsao also notes the potential risks associated with argenx's pipeline, which include regulatory and clinical hurdles as many indications are still undergoing clinical trials and are not yet approved. Additionally, the commercial risk is highlighted, as argenx has entered a market that is expected to become competitive.
Despite these risks, the broader analyst community maintains a bullish stance, with a consensus recommendation of 1.5 (where 1 is Strong Buy). For deeper insights into argenx's financial health and growth prospects, investors can access the comprehensive Pro Research Report available exclusively on InvestingPro.
The reimbursement risk is also mentioned, considering that some of the company's assets represent novel classes of therapeutics and may be priced higher than standard-of-care therapies. Finally, there is a risk of dilution, as argenx may issue additional shares in the future. The analyst assumes a tax rate of 17% in his valuation model.
In other recent news, argenx SE has seen significant developments in its financial performance and market prospects. The company reported preliminary fourth-quarter 2024 revenues of $737 million, surpassing both Truist Securities' and consensus estimates. This robust financial performance led to Truist Securities maintaining a Buy rating on argenx stock and raising the price target to $700.
Jefferies analyst Akash Tewari also reaffirmed a Buy rating and increased the stock price target for argenx to $772, following the company's disclosure of preliminary fourth-quarter global net sales for Vyvgart and Vyvgart Hytrulo. Meanwhile, Piper Sandler expressed a positive outlook on argenx, raising the price target to $725 and maintaining an Overweight rating. The firm's analysts increased their estimates for argenx's Vyvgart franchise, based on new neurologist surveys and calculations for various launch scenarios.
Argenx (NASDAQ:ARGX)'s ambitious plan to conduct 10 registrational and 10 proof of concept (PoC) studies in 2025 was highlighted as a strategic enhancement. Analysts from Truist Securities and Jefferies expressed strong conviction in argenx's potential, suggesting that the company is on track to achieve profitability within the year 2025 and potentially exceed its "Vision 2030" goals.
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