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argenx SE (NASDAQ:ARGX)
Q4 2019 Earnings Call
Feb 27, 2020, 9:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen thank you for standing by and welcome to argenx Full year 2019 Financial Results and Fourth Quarter Business Update Conference Call. [Operator Instructions]

I would now like to introduce Beth DelGiacco Vice President of Investor Relations at argenx. Thank you. Please go ahead.

Beth DelGiacco -- Vice President of Investor Relations (US)

Thank you operator. A press release with our fourth quarter business update and full year 2019 financial results was issued earlier today and can be found on the News and Events section of our website. Before we begin I'd like to remind you on slide two that forward-looking statements may be presented during this call. This may include statements about our future expectations clinical development regulatory time lines the potential success of our product candidates financial projections and upcoming milestones. Actual results may differ materially from those indicated by these statements. argenx is not under any obligation to update statements regarding the future or to conform those statements in relation to actual results unless required by law.

I'm joined on the call today by Tim Van Hauwermeiren CEO of argenx; Keith Woods COO; and Eric Castaldi CFO. On slide three is our agenda. Tim will start with the progress we have made toward achieving our argenx 2021 vision and executing on our broad pipeline. Keith will talk through our Phase III ADAPT trial design and provide an update on commercial launch preparation for efgartigimod in generalized myasthenia products. Eric will then provide financial results for the full year before turning the call back to Tim for closing remarks. We will then move to the question-and-answer portion of the call.

I will now turn the call over to Tim.

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

Thank you Beth and welcome everyone. Throughout 2019 we made meaningful progress toward achieving our argenx 2021 vision to become a fully integrated immunology company. This progress was across all key areas of the business research and development commercial and corporates. This is shown on slide four. We have trials ongoing with efgartigimod in four indications and will announce a fifth indication this year. Multiple trials are up and running under our Janssen collaboration in various AML settings and now in high risk MDS. ARGX-117 will enter the clinic this quarter and we will be unveiling ARGX-119 later this year. All of the R&D works funneled into our commercial franchise in neuromuscular disorders and hematology oncology. We recently received fast-track designation from the FDA for efgartigimod in myasthenia gravis.

With the potential for expedited review we are doing all the necessary work to be ready for launch of our first drug next year. Part of this preparation is growing our team which we are doing globally in Boston and Tokyo. All key commercial leads have been hired and we are building out our field team which Keith will discuss. And importantly following our financing in November where we raised over $550 million we have the capital to support this growth and expansion. Slide five. Today we want to talk about innovation which is core to our strategy guiding how we build and advance our pipeline from discovery to development to commercial. We build innovation into every step of our value chain. First innovation across our discovery efforts our R&D efforts are foundational to our growth strategy as we advance on our argenx 2021 vision.

Through our Innovative Access Program or IAP we work collaboratively with leading researchers to seek out immunology breakthroughs typically in the form and disease biology. Each of our current pipeline candidates has an immunology breakthrough behind it including our lead product efgartigimod. Slide six. We worked with pioneering in building efgartigimod and equipping the IgG one Fc fragment with mutations to increase its affinity for the targets and facilitate in natural binding and intercellular recycling path. By building innovation into the core of the molecule not only does it provide us a solid but it has led to unique clinical characteristics across efficacy safety and the ability to dose in multiple formulations.

On slide seven. Cusatuzumab was already created through our IAP based on the finding from that CD70 is integral to leukemic stem cell biology in AML. The depth of Phase I data we produced led to a global collaboration with Janssen and a broad development plan for the candidate in AML and high-risk MDS. two trials under the collaboration are enrolling patients include the pivotal Phase II culminate trial evaluating cusatuzumab with AZA in newly diagnosed AML patients and the Phase Ib evaluating various combinations of cusatuzumab with venetoclax and azacitidine in newly diagnosed AML. We expect more trials to start in the first half of 2020 including a high-risk MDS trial evaluating cusatuzumab and AZA and the trial in Japan in MDS and AML. We expect to have a data update in 2020 from this program.

It was approximately one year ago that we entered into the collaboration with Janssen and we are very happy with our decision to partner cusatuzumab to a large oncology player but also our decision in choosing Janssen. We have developed a communicative and collaborative relationships in building out the global development plan and we can say today that we are on track and on budget with our initial plan. Our partnered assets on slide eight also stem from the IAP and provide us the opportunity for nondilutive income. These include ARGX-140 and ARGX-116 which led to the creation of and statin respectively ARGX-112 which we licensed to Leo for dermatology indications ARGX-115 which we licensed to AbbVie for immuno-oncology. We reaffirmed our commitment to R&D last year unveiling two new pipeline assets from the IAP. ARGX-117 targets complement component C2 and ARGX-118 targets collecting.

We will start Phase I dose finding trial of ARGX-117 in healthy volunteers before the end of the first quarter. With ARGX-118 we are undergoing lead optimization work. Now on to how innovate across our efgartigimod clinical development on slide nine. We believe we are evaluating the broadest FcRn antagonist pipeline among our competitors with trials ongoing in MG ITP PV and CIDP. We expect to have up to five Phase III trials ongoing this year and to announce a fifth indication. Last month we shared Phase II proof-of-concept data in PV. This was our third proof-of-concept success with efgartigimod validating our beachhead strategy and our conviction that efgartigimod represents a true pipeline in a product. Slide 10. We took a unique and adaptive approach with our Phase II trial in PV.

Single evaluating the potential of efgartigimod across dose monotherapy versus combo therapy and of corticosteroids. With this adaptive trial design we were able to dial on the rest dose and combination for our registrational trial. The keywords to consider in understanding our data on slide 11 are speed and consistency. Around speed 78% of patients achieved rapid disease control with a median time to disease control for both mono and combination therapy of 14 to 15 days. Past complete clinical remission was observed in 70% of patients receiving an optimized dosing regimen including weekly or biweekly doses of 25 efgartigimod and corticosteroid doses that are suboptimal for these patients. We saw complete clinical remissions starting as early as two weeks and out to 10 weeks. This is very fast for patients. We hypothesize here there's a biological rationale to the synergy and speed which is that corticosteroids in the skin of regulated synthesis of the Desmoglein autoantigens.

The data we saw from this Phase II trial have been consistent with what we know about efgartigimod to date. We saw a favorable tolerability profile as determined by an independent safety monitoring committee. This is what we have seen in Phase I in healthy volunteers and also in MG and ITP Phase II trials. There was a consistently clear correlation between knockdown in and the clinical benefit as measured by an improvement PDI score. This helped and fallacious and newly diagnosed and relapsing. We are excited to present the full data set at the Society for Investigative Dermatology Annual Meeting in May and to launch a registration trial in the second half of 2020. Slide 12. Shifting gears to our innovative ITP program in which we will evaluate both 10 mg per kg IV of efgartigimod and our two ml subcu maintenance of efgartigimod. This dual approach will maximize our ability to reach more patients and will provide optionality for our market access team.

We will be running two Phase III trials enabling registration with our IV products and one Phase III incorporating the Fc maintenance products. We initiated the ADVANCE trial evaluating about 150 primary ITP patients dosed with 10 mg per kg IV of efgartigimod for both induction and maintenance of platelet counts. The primary endpoint for this trial will be a sustained platelet count response of more than 50000 platelets per microliter blocks during days 19 to 24 of the trial. We plan to initiate a small IV confirmatory trial called ADVANCE two in the first half of 2020 in about 50 family ITP patients dosed with 10 mg per kg IV of efgartigimod. The primary endpoint for this trial given its smaller size will be around a cumulative duration of platelet count response. And we will start the ADVANCE subcu trial in the second half of 2020 that will evaluate 10 mg per kg IV of efgartigimod for induction of platelet response and a two ml subcu of efgartigimod from maintenance.

We will share more on the details of this trial as it gets closer to its start. Slide 13. Finally our fourth efgartigimod indication CIDP the second indication in the neuromuscular franchise. The Phase II ACHIEVE trial is innovative in its potential to seamlessly expand into a registrational trial should we see an encouraging result or a go decision following analysis of the first 30 patients. We also recognize some of the development hurdles with a heterogeneous disease like CIDP and during initial stages to identify the best patients possible. First we will be certainly have patients with active CIDP. And second we will be certain we have patients with disease driven by autoantibodies as shown by response to efgartigimod. The final way in which we innovate with it here is that this will be the first trial that we will take forward our subcu enhance efgartigimod product at the onset enabling patients with this chronic progressive disease to have an at home easy-to-administer fast injection.

I'm now going to turn the call over to our COO Keith Woods to talk about ADAPT and our commercial preparation. Keith?

Keith Woods -- Chief Operating Officer

Thank you. Good morning everyone. As Tim discussed we try to be both innovative and patient-focused in our trial designs shown across the ITP PV and CIDP programs. This is most evident in our Phase III ADAPT design for MG. This trial took into account our Phase II data but also the perspective of our key stakeholders. We announced last month that our ADAPT Phase III trial is now fully enrolled and we will report top line data mid-year. With that approaching and our recently granted fast-track designation we have been ramping up our commercial preparation efforts and fine-tuning some of our launch considerations. We built ADAPT based on the positive data generated by our Phase II trial but also talking to patients physicians and incorporating their preferences into the design. Our Phase II data showed fast onset of action with responses occurring after the first week clinically meaningful responses in 83% of patients.

And perhaps the most surprising we saw sustained responses of at least six weeks in 75% of the patients. The 11-week trial ended with the majority of responders still in response so we were never able to measure the full durability of the drug. We took these data to the patients and we heard our appreciation for the potential extended period of clinical benefit between treatment cycles. This could provide them freedom from the clinic where they can go multiple weeks without doctors visits possibly go on vacation and not worry about therapy. With ADAPT we set out to replicate the Phase II data in a larger set of patients and to further validate efficacy and safety but we also wanted to measure the range of durability that patients experience from the drug and the potential for retreatment.

On slide 15 you'll see the ADAPT design. I'd ask you to focus on the blue box around the first eight weeks of the trial. This is the time period in which we measure the primary endpoint. This is the portion of the trial that focuses on registration. Here's what we did within that first eight weeks which is essentially a replay of the Phase II. Patients will receive one treatment cycle of four weekly doses of 10-milligram per kilogram IV efgartigimod. When a patient achieves at least a 2-point reduction on the MG-ADL for at least four consecutive weeks they are classified as a responder. The primary endpoint is the percent of responders at any point during this initial eight weeks compared to placebo. Notably only the receptor positive patients will be considered in the primary endpoint analysis. The rest of the trial is upside. On the left hand side of the slide you will see the upside in the enrollment criteria that extends beyond the primary endpoint population. We included patients who are receptor negative in the trial.

So the patients with autoantibodies against musk LRP four or components of the neuromuscular junction. We kept these patients at 20% but wanted to include them in the study because they are so often left out of clinical development. There is also an upside in running a 26-week trial rather than stopping it at the 8-week registration point. We wanted to keep the trial blinded and placebo-controlled after 26 weeks so that we could measure the full durability of the effect after one treatment cycle and assess the potential for retreatment. Having data in hand will be one piece of deposit of how efgartigimod can integrate into the current MG treatment paradigm but we also want insight from the patient on what their current treatment paradigm really means for quality of life. This is one of the ways we intend to innovate in how we approach commercialization. In the 26-week study patients are eligible for another treatment cycle as defined per patient protocol.

Throughout the primary study patients can receive a minimum of one cycle. So they respond after the first treatment cycle and not ever lose the clinically meaningful benefit or they can receive as many as three cycles. We will learn if patients who respond during the first eight weeks will respond again with retreatment and we will learn if patients who do not respond during the first eight weeks do respond after a second cycle. All of this is important for the label. We also included a 52-week open-label extension trial where retreatment criteria remain the same but patients can start to taper off standard of care to simulate more of a real-world set. Following the 26-week primary trial and the 52-week open-label extension we will have a clear view of the median number of cycles that will typically be needed in a year and this will be very powerful for our commercial team. With ADAPT we believe we have set up ourselves up well not only for registration but for launching a differentiated product into the MG space.

It is this type of innovation consideration that has defined how argenx has operated to date. If we look at slide 16. MG is an autoimmune disease in which each patient experiences the disease differently. We ultimately aim to treat the individualized nature of the disease with a patient-tailored dosing regimen. And with this type of trial we will be able to do so and enabling a shift away from the balancing act between symptoms and side effects that physicians and patients currently face with the standard of care with immunosuppressants. Efgartigimod is a first-in-class Fc antagonist and could also be the first to market in MG. Green space can be a significant advantage but it makes it critical to have a scientific engagement with physicians on targeting FcRn and reducing autoantibodies is a rational approach in treating MG. The role of the autoantibody is threefold in MG. They block the neuromuscular junction. They internalized receptors.

There are fewer available signals for transmission. And they recruit complement. By addressing the fundamental driver of the disease the autoantibody we believe we can reach a broader group of MG pace. We also hear from the patients and physicians that with long-standing therapies corticosteroids broad immunosuppressants and IVIg the side effects can sometimes be worse than the symptoms of the disease. Our hope is to offer efficacious therapy with clean tolerability profile that also allows the patient some flexibility and some time away from the clinic given a tailored dosing regimen. We have launched a real-world evidence initiative if we have a look at slide 17 called my real-world MG. This is the first of its kind state in MG which we will enroll 2000 patients. These patients have not necessarily experienced efgartigimod but are patients who live every day with the burden of suffering from MG. We've worked very closely with global patient advocacy organizations and physicians to drive awareness of my real-world MG.

This is a disease that needs awareness patients need a voice and they need more treatment options. From the study we hope to better understand patient perspectives on diagnosis treatment symptoms and the underlying economic humanistic burden of the disease. With favorable from ADAPT and my real-world MG we'll be in a strong and informed position when we engage with both payers and regulatory bodies about the value efgartigimod brings to patients and the healthcare system. My real-world MG is just one aspect of our proactive approach our ship to commercial organization. We started the year having heard all key commercial functions as shown on slide 18. The commercial leadership team is in place and doing the work to build out our commercial organization including U.S. and Japan. We have hired medical research liaisons in key regions and have also started to build out our thought liaisons team all to be out in the field engaging with MG physicians.

We will start the hiring of sales force following Phase III data and we aim to have the team in place approximately six months ahead of launch. Our global supply chain is also on track in preparation for launch. We have manufacturing capabilities with Lonza that enable us to be both flexible in scope and scalable. And finally while we are embraced a speed to market approach with our IV product we continue to listen to that subset of patients who may want a subcutaneous option. If we look at slide 19. Advancing our subcu enhanced efgartigimod product on the with a corporate priority we plan to engage it's a corporate priority and we plan to engage with the FDA this year to talk about what the pet forward will look like. Before I turn the call over here to Eric I want to say what an exciting time to as we transition into a global biopharma company with our Phase III data midyear the filing of our BLA by the end of the year and a planned 2021 launch of our first commercial product which would be the first launch of an FcRn antagonist.

With that I'd like to turn the call over to Eric for a review of our financial results. Eric?

Eric Castaldi -- Chief Financial Officer

Thank you Keith. So we are now on slide 20 and slide 20 covers our full year operating results which are detailed on today's press release and regulatory filings. Total operating income reached EUR82.6 million for the year ended December 31 2019 an increase of EUR53.4 million over the same period in 2018. The increase is related to the partial recognition of the upfront payment and the recognition of R&D service fees under our collaboration with Janssen and also to the recognition of the milestone payment received from AbbVie for the advancement of ABBV 151 into first-in-human clinical trial. Our expenses for the full year 2019 were EUR197.7 million compared to EUR83.6 million in 2018. Selling general and administrative expenses were EUR64.6 million for the full year 2019 compared to EUR27.5 million for the same period in 2018. The increases in R&D and SG&A expenditures over 2019 have been driven by the progress made within our late-stage pipeline including higher consulting and personnel expenses higher clinical trial costs and manufacturing expenses and the recruitment of additional employees to support ongoing activities.

We expect operating expenses to increase year-on-year as we further advance our pipeline and prepare for future commercialization. For the full year 2019 financial income amounted to EUR14.4 million compared to EUR3.7 million for the same period in 2018. Exchange gains totaled EUR6.1 million in 2019 compared to EUR12.3 million in 2018. The total net loss for the year ended December 31 2019 was EUR163 million compared to EUR66.6 million in 2018. We ended 2019 with EUR1.3 billion in cash cash equivalents and current financial assets compared to EUR565 million in 2018. This significant increase can be attributed to the closing of our global collaboration and license agreement with Janssen in January 2019 resulting in a $300 million upfront payment and $200 million equity investment and also for our global offering closed in November 2019 resulting in a EUR479 million of net proceeds.

I will now turn the call back to Tim.

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

Thank you Eric. slide 21. argenx for yet another exciting year led by our first pivotal data sets and expected regulatory submission in MG and the advancement of our robust pipeline. We expect to be running up to five Phase III trials and seven earlier stage clinical trials this year all of which will continue to feed into our commercial franchises. I would like to take this opportunity to thank our dedicated and talented team the patients and physicians who participate in our studies and you our loyal shareholders. Without the support of each of these stakeholders we would not be able to realize the promise of our development programs to bring new therapies to patients with limited treatment options.

Thank you for your time today. I will now turn the call over to the operator for your questions.

Questions and Answers:

Operator

Thank you, [Operator Instructions] Our first question comes from the line of Tazeen Ahmad from Bank of America. Please go ahead.

Tazeen Ahmad -- Bank of America -- Analyst

Hi, good morning. Thanks for taking my questions. Tim maybe a quick one for you about some recent news regarding a competitor. It was announced at the antibody program is not being pursued. It's also something that's related mechanistically to your program. And I was wanting to know what your initial thoughts were about that decision and what it may or may not mean for you in terms of confidence for your FcRn program in general. And then I have a follow-up.

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

Thank you Tazeen. Thank you for being with us today and thank you for the question. So this just highlights that not all FcRns are made equal something we have been calling out from the beginning. I think you do see between different molecules a clear differentiation along the efficacy safety and convenience angle. We are moving forward with our subcu products both in the CIDP clinical trial and into our FDA interaction for the MG indication.

Tazeen Ahmad -- Bank of America -- Analyst

And maybe Tim can you just give us a little bit of color on when in midyear I know people have been asking of us and you may not be able to answer it. But when you say midyear for data is that something that you can give us a little bit more granularity on?

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

No we cannot. I think midyear is the best possible guidance we can give you today.

Tazeen Ahmad -- Bank of America -- Analyst

Okay, thanks.

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

Thank you.

Operator

Thank you.Your next question comes from the line of Christopher Marai from Nomura Instinet. Please ask your question.

Christopher Marai -- Nomura Instinet -- Analyst

Good morning and thank you for taking the question. So first I wanted to touch upon some of the patient stratification criteria in the Phase III ADAPT trial for MG and some of our doc checks have suggested that the MG trial of rituximab and these patients failed due to well a higher placebo rate. And that may have been contributed to higher levels or different levels of I guess baseline steroid usage. So I was wondering if you could comment on that in the Phase III trial. And I have a follow-up.

Keith Woods -- Chief Operating Officer

Sure. Chris it's Keith. Thanks for the question. We did stratify the Phase III trial not only from a geographic perspective but also from the choline receptor positive to the choline receptor negative. And finally we did stratify based on the background concomitant therapies. I just want to call out to you that in the Phase II where we did not stratify the concomitant therapy that all patients were on was for a minimum of six to 12 months. And in fact the median time for receiving ISTs was for greater than three years. Although there was an imbalance the impact of the background therapies in the Phase II did not have a result on the outcome as three of our top responders in the efgartigimod arm were ones that had not previously experienced ISTs kind of what happens when you have small numbers in a trial. But ultimately we have stratified for it in Phase III.

Christopher Marai -- Nomura Instinet -- Analyst

Okay. And then with respect to the steroid doses have those been sort of normalized? Or are they being controlled in any manner? And then finally with respect to how the company expects to release the data should we expect a conference call a PR and then just top line data with follow-up presentations and publications or more detailed updates from the company when the data hits?

Keith Woods -- Chief Operating Officer

Yes. All I can say is that the steroid dose is comparable to what we've seen in Phase II and we will be bringing the data forth. We'll do top line first and then more in-depth release at a later time.

Christopher Marai -- Nomura Instinet -- Analyst

Thank you.

Operator

Thank you. Your next question comes from the line of Yatin Suneja from Guggenheim. Please ask your question.

Derek -- Guggenheim -- Analyst

Hey, guys, this is Derek [Phonetic] on for Yatin. Congrats on the quarter. Maybe just had a couple here. How much the treatment burden is a weekly hospital visit? I mean and then sort of what are you trying to achieve with subcu and enhanced subcu in terms of the injection frequency?

Keith Woods -- Chief Operating Officer

Yes. So first of all I guess I would clarify Derek that it's not necessarily a hospital visit to have this 4-week period of injections. This can be done via home infusion as well. But ultimately when we spoke with the stakeholders and offered up different options they really prefer to maximize the durable benefit that these four doses allowed as compared to just being on a chronic therapy on a fixed schedule every other week or so. So the convenience that this allows might not be during that 22 days but it's the benefit that exists afterward. Your second question was in regard to subcu. First of all the Halozyme-enabled subcu we've already shared that we are utilizing in our CIDP trial and that we will be taking that forward into MG so that we can provide more optionality not only for patients and for healthcare professionals but also for our market access team. I think you're asking maybe the difference between the Halozyme-enabled subcu and the subcu that we'll be using in ITP and that...

Derek -- Guggenheim -- Analyst

Or just in terms of how much the injection frequency could get could you get what's the added duration you could get with the Halozyme theoretically?

Keith Woods -- Chief Operating Officer

Yes. At this time we don't know the theoretical answer. We did share data at the CIDP meeting in December where the possibility of going to every other week is something we are looking at.

Derek -- Guggenheim -- Analyst

All right. That's very helpful. Thank you. And congrats again on a good 2019.

Keith Woods -- Chief Operating Officer

Thank you.

Operator

Thank you. Your next question comes from the line of Derek Archila from Stifel. Please ask your question.

Derek Archila -- Stifel -- Analyst

Hey, good morning, guys. And thanks for taking the question. I just have a few around the ADAPT study and in MG. So first off can you just give us a sense of what data you put out with the top line in terms of the redosing and also around the 26-week data in the Phase III? And then the second question would be can you just remind us on the redosing criteria in Phase III? So again what sort of symptoms do patients need to actually experience to require that additional dosing? And I have one follow-up.

Keith Woods -- Chief Operating Officer

Okay. Great. Derek I'll go ahead and take this one as well. What you can expect to see with the top line data readout is all patients will have completed the 26-week trial and will show data from the primary trial. We'll be sharing data along efficacy safety and convenience. For efficacy can we replicate the Phase II results? Safety does it look consistent with all of our other efgartigimod studies? And for convenience what can we accomplish with this patient-tailored dosing? the 26-week trial when you have a primary endpoint at week eight but having a placebo-controlled blinded study on retreatment is absolutely crucial for our payer conversations. We wanted to arm the commercial team with data while keeping the primary endpoint analysis as close to the Phase II as possible. And essentially we feel that this derisked the trial. And your last question was the criteria for retreatment which patients needed to lose their clinically meaningful response which was defined as a two-point change from baseline and ADL. This was the only way that we could truly measure the full duration of the impact of efgartigimod.

Derek Archila -- Stifel -- Analyst

Okay. And then just my follow-up was you mentioned on the in the in your comments around how many or I guess how often maybe MG patients go into the office a year. Do you have a figure for that in terms of how often they are going in to see their physicians? And again whether it be for dosing immunosuppressants or whatever I don't know but like just like how often are they generally seeing their physician to manage their?

Keith Woods -- Chief Operating Officer

Yes. Derek we've got data but it's quite variable because as you know the MG patient population there's quite a range. So some they're seeing their physician quite others with maybe less severe. They're not seeing them as many times per year.

Derek Archila -- Stifel -- Analyst

Thank you.

Operator

Thank you. Your next question comes from the line of James Gordon from JPMorgan. Please go ahead.

James Gordon -- JPMorgan -- Analyst

Hello, thanks for taking the questions. James Gordon from JPMorgan. Actually rather than a question I ask a question on a potential competitor. So the hypersialated data that we saw recently and I know it was just quite early data be interested in getting thoughts on a few aspects of that data. So hypersialated immunoglobulin is a lot more convenient than conventional immunoglobulin. And so you don't need to inject as much into someone. Could that mean a switch from conventional immunoglobulin sort of FcRn therapy will be less compelling? Do you think it could mean that immunoglobulins differently? So less is acute therapy more as a chronic therapy? And just the extent to which we can read the data they've already presented in ITP to any other indications? I mean to some extent we're reading from one indication to another. Can we do that at all for hypersialated? Or do we need to be quite careful on that? Any thoughts on the early data to be really interesting.

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

Thank you James. Thank you for joining us on the call today. So I think you called it out. These are early data. I think we need to wait for more data. What we have seen on the outside is kind of more efficient IVIg on a per gram basis but it's still IVIg. So the way IVIg is actually utilized in ITP is as you correctly say for the acute use for the rescue use. That is not the use which we envisage for efgartigimod where we think we will position the drug for chronic use. And actually our key competitor is most likely going to be receptor agonist. Did I answer your question? Okay.

Operator

Your next question comes from the line of Jason Butler from JMP. Please ask your question.

Jason Butler -- JMP -- Analyst

Hi, thanks for taking the questions. I have two. The first one just on 117. Can you maybe just point to any PD marker or biomarkers that you're going to be focused on in this first trial? And then second question on PV. You mentioned the mechanistic potential synergy with steroids. Have you generated any data to support this synergy in preclinical models?

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

Jason thank you for joining us. Thank you very much. So PD market for complement block like 117 and are pretty obvious. I think we would be looking at things like free C2. You could also look at markets for C3 activation. So we will be carefully these PD markers. That's one of the effects of complement inhibitors. It will allow us to basically optimize the dosing regimen in Phase II healthy volunteers. The second question remind me was relating to what?

Jason Butler -- JMP -- Analyst

PV and just have you got any preclinical data supporting the synergy?

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

So there is literature data that are academic groups. And I think these are public data in the literature where actually it's very well shown that corticosteroids up regulated synthesis of Desmoglein one and Desmoglein three the auto antigens in PV. That's the only way actually to explain the rapid onset of action also of corticosteroids in a disease like PV. And we believe that there is a hypothesis that the mode of action of efgartigimod really synergizes with this mode of action. If you take away the toxic pressure of the antibody Desmoglein one and Desmoglein three and your up regulated synthesis that could explain why we see such a fast closing of the lesions.

Jason Butler -- JMP -- Analyst

Okay, great. Thanks for taking the questions.

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

Thank you.

Operator

Thank you.Your next question comes from the line of Matthew Harrison from Morgan Stanley. Please ask your question.

Max -- Morgan Stanley -- Analyst

Hi, thank you. This is Max [Phonetic] on for Matthew Harrison. Can you confer can you provide an update on enrollment for the CIDP trial? Have you confirmed autoantibody involvement in any patients yet?

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

Thank you for joining us on the call today. So no we have not been public on any update on the CIDP trial. I think a likely update you can expect from the company is and when we approach the 30-patient go or no go.

Max -- Morgan Stanley -- Analyst

Okay, thank you.

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

Thank you.

Operator

Thank you. Your next question comes from the line of Akash Tewari from Wolfe Research. Please ask your question.

Akash Tewari -- Wolfe Research. -- Analyst

Hey, guys. So given that prior MG trials kind of use that MG ADL drop as your primary endpoint what's the FDA thinking on ADAPT if it hits on the primary responder analysis but misses on MG-ADL drops? And have you gotten feedback from any KOLs on the clinical meaningfulness of that endpoint? And also on just got and then disclosed on the earnings slide yesterday that they'll have a weekly subcu dose. Based on our calcs that means that that is going to have maybe a five mg per kg maybe at most 10 mg per kg on their weekly arm. And we don't really see potency drop until 15 to 30. So is it fair to say you guys should be the only FcRn that can have a biweekly subcu going forward? Thanks.

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

Thank you for these questions. So from a primary endpoint point of view we have been testing and the primary endpoint with both the FDA and the PMD. So a delta of two points on an ADL score is indeed clinically meaningful and the four consecutive visits requiring the top of two points or more actually has buy-in from FDA PMDA. I cannot comment on how the FDA able to react to the data in case we would be missing on this endpoint while maybe scoring on some of the other endpoints. I think that's premature to talk about. Subcu dosing I think you're hitting. So everybody is using the word subcu dosing but really make a difference between injection and infusion. I think all FcRn antagonist which do not have access to the Halozyme technology would either have to refer to multiple subcu injections or a bigger volume subcu infusion. I think Momenta is not an exception to this. So to answer your question yes I think we're likely the only party here with an every other week subcu injection if the 1000 milligram per kilogram data hold true.

Akash Tewari -- Wolfe Research. -- Analyst

Thanks so much.

Operator

Thank you.Your next question comes from the line of Tiago Fauth from Credit Suisse. Please ask your question.

Tiago Fauth -- Credit Suisse -- Analyst

Hey guys. Thanks for taking the question. Just a quick follow-up on the bridging strategy for the enhanced formulation. So I know you're going to engage with the FDA during this year but curious if you could outline some of the scenarios and what could that imply from a time line perspective on getting subcutaneous enhanced for relation to gMG patients following the IV launch. Thanks.

Keith Woods -- Chief Operating Officer

Hi, This is Keith. Thanks for the question. The scenarios that could be in play and what we actively look forward to discussing with the FDA is because such since we have such a perfect biomarker with IgG looking at PK PD and healthy volunteers would be our first and preferred option to discuss with them since we can prove noninferiority situation in PD. The other case scenario could be that we need to do PK PD in MG patients. And finally I would say that the situation that would be not our preferred would be having to run a full Phase III. We do know that the FDA has gotten much more comfortable with the enhanced technology but we are not going to estimate until we've had that meeting. But that's pretty much your three scenarios.

Tiago Fauth -- Credit Suisse -- Analyst

Thanks

Operator

Thank you Your next question comes from the line of Yaron Werber from Cowen. Please ask your question.

Yaron Werber -- Cowen -- Analyst

Great, thanks for taking my questions. I have a couple of questions. I think if you don't mind one is on ADAPT. The other one is cusatuzumab. So just in ADAPT you're argenx is in the lead obviously and it's also the first company that's doing this individualized so the tailored dosing regimen. Other companies like Momenta or maybe are testing more of a fixed dosing scheme. So now that you're going to have in hand in subcu I mean you'll have sort of the ability to go to market with this individualized dosing regimen but would you consider also doing a fixed dosing regimen if need be given that you're going to have a subcu just in case a more chronic dosing would boost efficacy? And then have another follow-on.

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

Yaron this is Tim speaking. So I think it will depend a little bit on the ADAPT data. I call out that our colleagues in the space like Momenta and Immunovant still in the Phase II. So I think they're still testing some of the basic of their molecules while they still need to craft the Phase III strategies. We really crafted the Phase III strategy on the strengths of our molecule. I don't think we should extrapolate between molecules by the way. But I think the Phase III data for that will be telling. You're absolutely right that next to the IV product we have a second shot on goal with the subcu product which is giving us in principle more dosing optionalities. So let the data speak and then we will adjust to that.

Yaron Werber -- Cowen -- Analyst

Okay. And then a question on CULMINATE and cusatuzumab which is a program that J&J we know is very serious about. The CULMINATE study potentially I think you're mentioning it potentially could be pivotal. It's 150 patients in patients who are not candidates for intensive chemotherapy who are naive AML patients. The studies with but the study does not have a control and from what I can tell the primary CR and the secondary is the CR or an MRD at least with in trials. It doesn't look like PFS and survival are sort of secondaries. So I guess my question is are you looking at PFS and survival? And then what would make that into a pivotal study just given that VENCLEXTA is approved. I mean I know there's a lot of enthusiasm for the drug and we're very enthusiastic to and J&J is moving very quickly but I just want to understand this Phase II trial design. Thank you.

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

Thank you for the question. And to be honest I don't know the complete answer to the question because it will all hinge on the data. So you're absolutely right there is no control arm. Now for the venetoclax five days trial the Phase I/II study based on which they filed the results no control arm. And actually in today's world it's getting increasingly difficult to just enroll patients in a VIDAZA arm as a control. And whether this trial would qualify for a registration trial will actually depend on the strength of the data. So I believe that our partner Janssen called the study registration directed. That means that there is a belief that if the data would be strong at least there is a conversation to be held with the FDA similar to the conversation they had on the classified data combination data. Does that make sense?

Yaron Werber -- Cowen -- Analyst

Yes it does. And then preclinically is there a synergy between cusatuzumab and venetoclax? And maybe you could just can discuss is there any overlapping toxicity.

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

Yes. I'm glad you asked the question because this is the excitement behind the combination trial where we testing cusa in combination with venetoclax with and without VIDAZA. The ASH which we presented last December basically highlights the preclinical work demonstrating a synergy between cusa and venetoclax which is even stronger than the synergy which we already documented for cusatuzumab data. So there is a tremendous amount of excitement around this data because we think that the future of AML is going to be a combination therapy where on the one hand you push for an as high response rate as possible and you try to maximize the duration of your results while maintain our controlling toxicity. And that's I think with cusatuzumab could be such a strong combination partners because with its unique mode of action it synergizes with standard of cash but it's also a therapy which due to its favorable safety and tolerability profile could be the backbone of long-term therapy.

Yaron Werber -- Cowen -- Analyst

Thank you.

Operator

Thank you. Your next question comes from the line of Graig Suvannavejh from Goldman Sachs. Please ask your question.

Graig Suvannavejh -- Goldman Sachs. -- Analyst

Yeah, thank you. Thanks for taking my questions. And congrats on all the progress in 2019. I also want to add I guess I want to applaud you for my real-world MG trial. And maybe the question is maybe this is for Eric. I mean not Eric for Keith. What specifically can you gain from that study that would add to the commercial story for efgartigimod? I just wanted to be more granular. And how we should be looking at that study? And then maybe a question for Eric as it relates to 2020 and financial guidance. I would expect a significant step-up in SG&A in the second half as you kind of hopefully build out a commercial sales force following positive Phase III data in MG. But how well should we be thinking about perhaps R&D throughout 2020?

Keith Woods -- Chief Operating Officer

Great. Graig thanks. I'll start and then hand it over to Eric. The reason why my real-world MG is important is really for us to build on the value proposition of efgartigimod. Right now there's not a lot of research that goes into the impact of what MG is doing to a patient and their life. What does it mean for the amount of we're seeing the hospitalizations the burden of having the disease on not only them but sometimes the caregivers that they have. The payer doesn't know much about this. So if we document it in a real and then apply that to a real economic model we're going to be able to differentiate an efgartigimod patient from what's historically taking place in these patients. This should set us up very well as we go to build value dossiers to be utilized across the globe. The second thing is it's very important to us to not just say we're patient-focused organization but to be a patient-focused organization. And this is also a commitment to this space. It's a commitment to the MG patients and we want to give the patients a voice because the data will be available to the patient advocacy organizations. Eric do you want to answer the second question?

Eric Castaldi -- Chief Financial Officer

Absolutely. So thank you for the question. So yes we expect a significant increase in the burn rate in 2020. We did not give any guidance. But if you look for SG&A expenses what we have done is built a milestone approach. So it means that we're going to wait until we have the study to accelerate on the recruitment of the commercial team. We have already recruited certain key positions but the real acceleration is going to be after we have the results from ADAPT. And regarding R&D you should consider two things. If you look at 2019 we had only one Phase III trial. In 2020 we are planning to have up to Phase III trials. So I mean a significant increase. So this is going to be reflected obviously in R&D expenses. And the second element to consider is that the Janssen collaboration. So we expect the cost there to significantly be picking up also. You will see a lot of clinical trials starting in 2020.

Graig Suvannavejh -- Goldman Sachs. -- Analyst

Thank you very much.

Eric Castaldi -- Chief Financial Officer

Thank you.

Operator

Thank you.Your next question comes from the line of Emily Field from Barclays. Please ask your question.

Emily Field -- Barclays -- Analyst

Hi, I was wondering if you could just comment on your thinking about sort of a holistic real-world treatment approach in MG. One of your FcRn competitors has talked about FcRn being complementary with complement therapies and that there could be perhaps more of a portfolio-like approach in treating MG which I know is kind of in some of the ways that the approach is taken in the middle of selling in ITP. I could just I was just wondering your views on that and if you think that for most MG patients at regimen would be sufficient. Thank you.

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

So let me take that question. I think again it will be on the ADAPT Phase III data. Theoretically we would argue that the autoantibody is causal to the disease and one of the notable modes of action it has involved the recruitment of complement. So we believe that by eliminating the autoantibody you don't need actually a complement blocker on top of that. But we need to wait for that data and see how much room there is still for improvements. And after we had a chance to see for sure our government cannot address the 20% autoantibody negative patients which by the way are in very high unmet need because autoantibody involved is certainly not recruiting complement.

Emily Field -- Barclays -- Analyst

Thank you.

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

Thank you.

Operator

Thank you. Your next question comes from the line of Sandra Cauwenberghs from KB Securities. Please ask a question.

Sandra Cauwenberghs -- KB Securities -- Analyst

Hi, First my congrats to the whole team. Nice progress in 2019 and looking forward to all of the readouts coming through in 2020. My first question. Well there's two questions left. The first one is actually on the ITP indication. So with regard to the subcu trial that you plan to initiate so the combo IV subcu. I fully understand and respect that you cannot give any details on the exact trial design but I would like to understand how you will actually try to tailor-made this to the patient need and the response. So how can you measure what the proper maintenance dose would be and to what extent does this still require handle monitoring in a hospital setting? Also relating a little bit to the agonist question that came earlier. The second question I would like to go back to cusatuzumab and the venetoclax rationale. It's quite interesting to see the acceleration going on in the hands of Janssen. And actually the fact that you can combine with the VH streaming metric. I was wondering if this actually opens up doors toward other rational combinations. Are you involved in that work? Or is this fully in the hands of Janssen?

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

Sandra thank you for joining us on the call. The answer to your ITP question goes as follows: The biomarker of course to monitor whether patients are and stay in response platelet count. And I think if you go to more severe ITP patients we know that they frequently visit their physician to have platelet count check. So it's a relatively easy practice. And by the way that is the practice which is already being used today for the current ITP medication. Concerning your cusatuzumab question. I think we have been saying in public that actually and subject of the global development plan with Janssen is to try and address the different patient subsets in AML but also all the logical combinations. So yes we're actively involved in exploring combinations and you will see more combinations out of the gate in the future.

Sandra Cauwenberghs -- KB Securities -- Analyst

Thank you.

Operator

Thank you. Your last question comes from the line of Yanan Zhu from Wells Fargo. Please ask your question.

Yanan Zhu -- Wells Fargo -- Analyst

Alright, thanks for fitting in and congratulations on the program last year. So first a question regarding the ADAPT trial patient population baseline characteristics. Could you broadly talk about whether in terms of the disease severity and background treatment or concurrent treatment whether those are all in line with your Phase II population? I understand that the antibody status is different. But other than that are those characteristics broadly in line? And particularly also whether prior IVIg or patients are allowed in either of those trials?

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

Thank you for the question. The baseline characteristics include exclusion criteria are almost identical to the ones which we deployed in the Phase II trial. So expectations to be on background medication and to see either placebo or efgartigimod being dosed on top of standard of care. Standard of care can involve our strategical industries inhibitors and steroids and then ISPs like microphenolate is the bioprint cycle of sport and the likes. IVIg use rituximab use eculizumab use and is permitted historically but we need to respect wash-out period before patients can come on study. Again identical to what we did for the Phase II. I think the slight difference between the patient population in the ADAPT trial and the Phase II proof-of-concept study is when you look at the MGFA classification of the patients and we are including also patients which are in Class IVb which from a medical point of view it's probably not important but it's just an inferable level.

Yanan Zhu -- Wells Fargo -- Analyst

Got it. Got it. Very helpful. And also sorry if I missed this earlier but I think that there was an earlier question on redosing criteria in ADAPT. Presumably it is symptom-based. And just wondering if you could talk a little more about how it's redosing the need for redosing decided.

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

In order to measure the full duration of benefit you need to have an objective measure for before. That's all specified in. Think of a worsening on the ADL score which is also the score we use for the primary endpoint but the protocol is specifying the details and we have not really disclosed those details.

Yanan Zhu -- Wells Fargo -- Analyst

I see. And lastly can patients receive back-to-back four weekly infusions at a later part of the trial after the 8-week primary analysis period?

Keith Woods -- Chief Operating Officer

No they cannot. So during the 26-week state you've got the patient would have to have at least a period of a 4-week interval between the first cycle and the second which is why I mentioned in the prepared statements I think we'll see a scenario of some patients that experienced only one cycle of therapy and have this extended duration of benefit. You'll see some that have time for two and a complete nonresponder which is where you're asking about on a back-to-back or a placebo patient with a nonresponse could maximize as many as three over that 26-week period.

Yanan Zhu -- Wells Fargo -- Analyst

Very helpful. Thank you.

Keith Woods -- Chief Operating Officer

Thank you.

Operator

Thank you. There are no further questions at this time. I'll now turn the call back to Beth.

Beth DelGiacco -- Vice President of Investor Relations (US)

This concludes the call today. We want to thank you for your time and ongoing support. We look forward to an exciting year and updating you on our progress.

Operator

[Operator Closing Remarks]

Duration: 64 minutes

Call participants:

Beth DelGiacco -- Vice President of Investor Relations (US)

Tim Van Hauwermeiren -- MSc, EMBA Chief Executive Officer

Keith Woods -- Chief Operating Officer

Eric Castaldi -- Chief Financial Officer

Tazeen Ahmad -- Bank of America -- Analyst

Christopher Marai -- Nomura Instinet -- Analyst

Derek -- Guggenheim -- Analyst

Derek Archila -- Stifel -- Analyst

James Gordon -- JPMorgan -- Analyst

Jason Butler -- JMP -- Analyst

Max -- Morgan Stanley -- Analyst

Akash Tewari -- Wolfe Research. -- Analyst

Tiago Fauth -- Credit Suisse -- Analyst

Yaron Werber -- Cowen -- Analyst

Graig Suvannavejh -- Goldman Sachs. -- Analyst

Emily Field -- Barclays -- Analyst

Sandra Cauwenberghs -- KB Securities -- Analyst

Yanan Zhu -- Wells Fargo -- Analyst

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