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argenx SE (NASDAQ:ARGX)
Q2 2020 Earnings Call
Jul 31, 2020, 8:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Welcome to argenx Half Year 2020 Financial Results and Second Quarter Business Update Conference Call. [Operator Instructions] To follow the presentation, we ask that you navigate the slides as directed by argenx management. [Operator Instructions]

I would now like to Beth DelGiacco, Vice President of Investor Relations at argenx. Thank you.

Beth DelGiacco -- Vice President of Investor Relations

Thank you. A press release was issued earlier today with our half year 2020 financial results and second quarter business update. This can be found on our website along with the presentation for today's webcast. Before we begin, I'd like to remind you on slide two that forward-looking statements may be presented during this call. These 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. Our genus 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, Chief Executive Officer; Keith Woods, Chief Operating Officer; and Eric Castaldi, Chief Financial Officer. On slide three, you can see our agenda. Tim will be highlighting recent milestones, including the positive Phase III ADAPT data we reported in May and the progress we've made in our ongoing efgartigimod programs and additional indications. We announced a change in our development plan for cusatuzumab this morning, and Tim will update you on the reason for that shift in strategy. And he will close with an update on our earlier stage programs, including those that are wholly owned and partnered. Keith will then provide an update on our commercial preparation, and Eric will share our financial results. We will then close with a Q&A session.

I will now turn the call over to Tim.

Tim Van Hauwermeiren -- Chief Executive Officer

Thank you, Beth, and welcome, everyone. We appreciate you joining the call today. We are now almost six months into what we can only continue to describe as unprecedented times. I hope you and your families are staying safe and healthy. At argenx, we have been opening our organic offices on a restricted basis as we watch the data on the number of coronavirus cases in Belgium. We continue to keep our work from home mandate in the U.S. and Japan. Throughout this virtual work environment, our team has kept to its high work standards to minimize disruptions to our business as best as possible. For this, I must share my gratitude to the entire team in navigating this new normal. On slide four, I would like to highlight some of the significant milestones we have achieved virtually as a team all of which will be covered in more detail later in the call. We executed a key Phase III data disclosure with the top line readout of our ADAPT trial, including a subsequent financing to support our first commercial launch and the advancement of our differentiated pipeline. The data from ADAPT showed that efgartigimod has a promising therapeutic profile with robust efficacy and tolerability and the potential to offer individualized dosing to patients. These results, along with our having enrolled ADAPT ahead of pace, have further strengthened our leadership position among SGRM antagonists. We have also worked hard to stay on track with the filing of our BLA to the FDA expected by the end of the year, and our filing in Japan in early 2021.

That plus our long-term open-label extension study has had a high retention rate and continues to provide us the safety data we need for our regulatory finance. Our clinical operations team has been able to open new trial sites at an impressive space during the last few months, including those for our ITP and CIDP trials. We have implemented important measures into these trials to adapt to social distancing requirements and the challenges patients face in visiting sites in person. We quickly enabled our ARGX-117 complement inhibitors to be studied in covered patients and will continue to be nimble should the second wave of the virus come to Belgium. We are also ready to start our planned Phase I trial of ARGX-117 in healthy volunteers any day. Throughout the last six months, we have been able to maintain all that activities by creating a safe work environment for these essential employees. This has allowed us to keep discovery efforts on track. And finally, the positive Phase III ADAPT data readout was a key gating event for us to accelerate our transformation into a commercial organization. This includes the ongoing expansion of our team to prepare for the anticipated U.S. and Japan launches of efgartigimod. We have been fortunate to make a lot of excellent hires recently. And of course, our increasing commitment to the physician and patient communities has remained a top priority during this time through virtual engagement.

Slide five. Before I transition to the rest of our business update, I'd like to say that while COVID-19 has presented a multitude of new challenges over the past few months, we continue to demonstrate our functional agility to adapt as needed. We will not be a company that accepts delays without finding ways to think and work differently and to combat the unforeseen obstacles we are facing. We remain sharply focused on executing our 2021 vision to be a fully integrated immunology company. This is driven by preparing for a successful launch of our first product, executing on our differentiated pipeline of earlier late-stage development programs and building out our pipeline through our immunology innovation program, which is on track to yield our argenx 119 later this year. This will be our tenth pipeline asset that is either wholly owned or enhance of partner. Let's first talk about efgartigimod, our first-in-class of antagonists. On slide six, in May, we were thrilled to report positive top line data from the Phase III ADAPT trial which show that efgartigimod was well tolerated and able to drive deep responses that support our plan to offer individualized dosing to patients. We plan to show the full ADAPT data set later this year at a medical meeting. These meetings are all shifting to virtual and adjusting their programs as necessary but as soon as we have our confirmed plan, we will share it. To quickly summarize the top line results, on slide seven. ADAPT met its primary endpoints with 67.7% of acetylcholine receptor antibody positive GMG patients, which were responders on the MG-ADL score compared with 29.7% on placebo with a p-value of less than 0.0001. We define a responder as having at least a 2-point improvement on the MG-ADL score for at least four weeks or for five consecutive measurements.

This was a pretty high bar for the primary endpoint since we included this durability component. We confirm this efficacy response on the QMG score as well with 63.1% of antibody positive patients responding to efgartigimod compared with 14.1% on placebo on the QMG score with again a p-value of less than 0.0001. To be a responder, patients needed again a 3-point improvement for five consecutive measurements. On slide eight. We saw better response as measured by minimal symptom expression or reaching an MG-ADL of 0 or 1. This is an important measurement for patients and physicians because it means that patients are generally symptom free. 40% of efgartigimod treated antibody positive patients achieved minimum symptom expression compared to 11.1% treated with placebo. We also showed that patients responded quickly and some for an extended period of time. Of the 44 patients who were efgartigimod responders, 84.1% had a fast response initiated within the first two weeks. Additionally, 88.6% of patients who reached the primary endpoint achieved a response for at least six weeks, 56.8% for at least eight weeks and 34.1% for at least 12 weeks. On slide nine. Response rates were consistent during a second treatment cycle of efgartigimod. Remember the 12 patients or 27% who responded in the first cycle never required a second cycle. And the start of the second cycle is dependent on the durability of the response in the first cycle. 70.6% of patients who received a second cycle responded including 36.8% of patients who were not responders in the first cycle. We attribute some of the numerous bonders in the second cycle to the primary endpoint definition. We had several patients that had good responses to efgartigimod in the first cycle, but did not meet the high bar of having a clinically meaningful response for five consecutive measurements. We also saw a favorable safety profile that was comparable to placebo and a very high rollover rate from the primary 26-week trial to the long-term open-label extension trial called ADAPT Plus.

I Would like to contextualize the importance of the ADAPT data readout for our overall efgartigimod strategy. With these strong data, we are looking to disrupt treatment paradigms in autoimmunity. We know that FcRn is central to IGG regulation. So by targeting it, efgartigimod could be a logical, new therapeutic option for many patients suffering from autoimmune diseases that are driven by pathogenic autoantibodies. Slide 10. We currently have the broadest FcRn pipeline, evaluating four current indications in three distinct therapeutic areas. We are also planning to announce our fifth indication this year. We expect to have the first FcRn antagonist available to MG patients next year and with this approval, we can start a parallel track of investigator-sponsored trials in indications that may not meet the high bar for the registration program, but where the biology is solidly understood to be driven by pathogenic IgGs. The ADAPT readout was a gating event to proceed full steam ahead in the preparation for our first commercial launch, the expansion of our commercial team and in our longer-term planning to get efgartigimod to all immune patients as quickly as possible.

With that, I would like to shift to our ongoing efgartigimod trials and those that will start this year. Slide 11. It is a top corporate priority to mitigate disruptions from COVID-19, which are now impacting our ongoing trials. To do this, we have focused on several initiatives for the ADAPT Plus open-label extension trial in MG and our advanced and ADHERE programs in ITP and CIDP, where we have faced enrollment delays. First, we are integrating telemedicine into clinical trial protocols where possible. We are also implementing home infusion opportunities for patients who do not feel comfortable traveling to infusion centers. And finally, we are working to prioritize subcutaneous and atigit. We're using the subcutaneous formulation in the adhere CIDP trial and will be implementing subcu into ITP as well this year. We'd like to update you on our ongoing clinical trials. In the ADAPT Plus open-label extension trial, 133 MG patients remain on study. While we cannot yet quantify the enrollment delays in the advanced audit programs, we have been pleased with our progress in opening clinical trial sites, virtually for both. We have opened advanced two for enrollment, but are also in active dialogue with the FDA to assess how best to bring subcu to the forefronts in the ITP Phase III program. With CIDP, we now expect the go no-go decision to be a 2021 event. This will happen after the first 30 patients get to part A in the trial and we see if they have response to efgartigimod. Remember that in here, there is a long screening period to ensure we are getting active CIDP patients. We think this disciplined trial design will pay off in getting the right patients to receive efgartigimod and to assess the percent of patients whose disease is antibody mediated. CIDP is also the first trial in which we are evaluating the subcu efgartigimod that emerged from our collaboration with Halozyme. This collaboration has turned out to be a key strategic decision and competitive advantage.

Halozyme's and hand delivery technology is well-validated with a document safety profile across many biologics. By using this technology, we can achieve at least the same IgG reductions as with the 10 mg per kg IV formulation and this in a fast, effortless, single subcu injection. We believe this will be an important offering in each of our indications to get to as many patients as possible. On slide 12, for our program, we will be launching the Phase III trial in the second half of 2020. We continue to be very excited about this program after the positive results we showed from the ADAPT Phase II trial. As a quick reminder of the data, we saw that 90% of patients achieved rapid disease control by a median time of 15 and 22 days for monotherapy and combination therapy. Complete clinical remissions were observed in 70% of patients receiving the optimized dosing regimen, determined to be efgartigimod dosed at least every two weeks in combination with oral prednisone. 73% of patients receiving 25 mg per kg efgartigimod achieved end of consolidation, including patients who prefer to taper their steroid dose rather than potentially achieving a complete clinical remission. Importantly for PV patients, we also saw a tolerability profile that was favorable and consistent with data from previous efgartigimod studies. Based on these results and on early discussions with physicians, we see how efgartigimod could fit squarely into current treatment practice to address unmet needs. We will be talking more about the Phase III program as it gets up and running later this year. Moving on to cusatuzumab on slide 13. Today, we announced a change to the cusatuzumab development strategy, which we believe will be best aligned with a rapidly evolving treatment paradigm in AML.

We'd like to first provide a quick reminder of our strategy in partnering this asset. cusatuzumab has a unique mechanism of action, targeting CD70 and leukemic stem cells. We recognized its potential to be broadly used across AML settings and in MDS patients. Janssen is a global oncology player and an ideal partner to accelerate and expand the global development plan we had agreed on together. CULMINATE at was the first trial launched under the Janssen collaboration, and we had two primary objectives with it. First was dose selection between 10 and 20-milligram per kilogram cusatuzumab. We achieved this and have selected 20-milligram per kilogram as the go forward dose. Second was to design a trial that could be registrational in the case of a stellar response rate, clean safety profile and durable responses. We knew that data would be a high bar to beat in accelerating our path to registration. We plan so that the second trial launched under the collaboration would be a Phase Ib trial of cusatuzumab in combination with venetoclax and azacitidine. The new venetoclax has shown early potential in AML and recognized that a combination approach may ultimately be the path forward. Maturing data from culminates suggests that complete response rates are not likely to exceed those from the vial a trial of venetoclax in combination with azacitidine as presented at EHA in June 2020. The it is too early to make a judgment on durability of response and from a tolerability perspective, the profile looks consistent with what we have seen in past trials. We currently think the best path forward for cusatuzumab is to study it in combination with venetoclax to challenge the emerging standard of care. This strategy is supported by positive KOL feedback and by preclinical data that were presented at ASH last year showing synergies between cusatuzumab and venetoclax. We hope to amplify the venetoclax response rates to extend the duration of the responses and to provide a tolerable therapy based on early data we have seen. We expect the registration strategy for cusatuzumab to be determined as we continue to evaluate maturing data across the cusatuzumab program and AML treatment landscape. The CULMINATE trial alone is unlikely to form the basis of a BLA submission.

This means that we will not be enrolling more patients into culminate beyond the 103 already enrolled. We will be prioritizing the Phase Ib trial of the triple combination of CSA with venetoclax and is acitinib. The trial had been on hold due to COVID-19, but is enrolling again at initial sites as well as new sites. You can see on the slide that the MDS trial remains passed. And the ongoing trial in Japan, which was not passed due to COVID, continues to enroll. We cannot provide detailed data today since they are still maturing, but we have committed to show top line results from CULMINATE in early 2021, including our rationale for the 20-milligram per kilogram dose selection. We know this is important to you as shareholders, and we are working with Janssen to make this possible. We, of course, want one of the fastest path registration for cusa, but we also want to remain disciplined in our development strategies to ensure we are running files that make sense within the current treatment environment. We believe that by taking a combination approach, we are moving forward in the best possible way to disrupt the AML treatment paradigm. We would now like to shift quickly to our other development programs, including our wholly owned assets, ARGX-117 and ARGX-118 and those fully in the hands of pounds. On slide 14. As I mentioned earlier, we are ready to dose the first healthy volunteers in the Phase I trial of ARGX-117. This trial delayed due to COVID, but will not be starting imminently. We believe that by targeting C2, ARGX-117 could be a pipeline in the product against severe autoimmune diseases in the neuromuscular space and possibly in kidney or heme as well. With the Phase I trial, we will assess PK/PD free C2 levels for dose selection, bioavailability and ADA.

We will also look at safety and tolerability. Our plan is that once we identified a dose from the Phase I trial, we can launch parallel trials in autoimmune indications. We have already identified an initial indication, multifocal motor neuropathy, which is a rare, typically progressive neuromuscular disease that can greatly impact the quality of patient's life. Also know that plays a key role in acute respiratory distress associated with COVID-19. This has shown to be a deadly complication of the infection. We are working with our immunology innovation program collaborated with with to make ARGX-117 available to COVID patients at the Academic Hospital. This is currently the only site for the trial, and thankfully, there are no longer many available COVID patients in this region. We will continue to move forward with ARGX-117 development plan in healthy volunteers, and should there be a second wave of covered in Belgium, we will make the drug available, possibly with more in human data at that point. We are also making progress in selecting a lead for ARGX-118 and are preparing to announce ARGX-119 this year. On slide 15. As you know, our immunology innovation program has also been a productive engine for assets which we have partnered. ARGX-112, which is now LP 0145 in the hands of LEO Pharma, they had post a Phase I trial in atopic dermatitis due to COVID but are preparing to reopen sites later this summer. ARGX 114 is now AGMB 101 in the hands of agomab. And ARGX-115 is now ABBV 151 in the hands of AbbVie. We do not have any update on these molecules today, but you will recall that AbbVie did not pass that trial in solid tumors due to COVID. So this study remains ongoing. We also recently learned from that they initiated dosing in the first-in-human trial of SP 5058 and targeting APOC3 for the potential treatment of dyslipidemia. This was formerly ARGX-116. Our commitment as part of our argenix vision is that we will continue to prioritize our immunology innovation program, even as we become a commercial organization. In being a fully integrated immunology company, we want to be as much a commercial organization as an R&D engine.

With that overview, I will now turn the call over to Keith for a discussion of our commercial readiness.

Keith Woods -- Chief Operating Officer

Thank you, Tim, and good morning, everyone. Please see slide 16. Today, I want to give you an update on some of the ways in which we are preparing for a successful launch of efgartigimod in the U.S. in 2021 and in Japan following the U.S. launch. We've been providing you updates on our commercial preparation for over a year now. But following the positive Phase III data readout, we have felt a dynamic shift and the work we are doing to get navigation to patients as quickly as possible. I can tell you today that all commercial preparation activities are on track across each of the key work streams. As a first step, we are right on track with our BLA filing to the FDA and with our JMAA filing to the PMDA in Japan. The BLA will be filed by the end of 2020 and and the JMAA in the first half of 2021. This will be a rolling submission, allowing for us to include longer-term safety data from the ADAPT Plus trial as we have it. We additionally are planning to meet with the FDA in the fourth quarter of this year to talk about our subcutaneous formulation of the efgartigimod and how we can initiate a bridging strategy to get it into MG patients as soon as possible.

This is a top corporate priority. We are right where we need to be in terms of supply chain preparation. We have a long-established alliance with Lonza and manufacturing for efgartigimod is currently out of two different locations, one in the U.K. and one in Singapore. We will be ready with our commercial inventory in time for both our U.S. and our Japan launches. We also have the scale-up potential to expand our manufacturing capacity to a third location in the U.S. as we reach even more patients and more geographies. We have entered into collaboration with Cardinal Health as our U.S. third-party logistics partner, and in the process of building a strategic and patient-centric network of specialty pharmacy and specialty distribution partners to ensure broad access. Additionally, we're in the early phases of engaging with U.S. payers and will continue these conversations as we progress to launch. Our interactions with physicians continue to be a top priority, and we have been able to engage with them virtually over the last several months. In sharing our ADAPT data with the physicians, we've heard positive feedback on the potential for an individualized dosing approach since patients with myasthenia gravis have different courses of disease and would benefit from a treatment option that is purpose fit to this variability. On slide 17, we know that in the U.S. there are 16,000 neurologists who actively treat 65,000 adult MG patients. Of those 65,000 patients, 20,000 with generalized MG. 20,000 of them will likely need treatment beyond steroids and other current options. This is what we see as the target addressable market for efgartigimod in the U.S. In Japan, there are about 20,000 total MG patients that suffer from MG and are treated by 200 to 300 neurologists.

For physicians, we can't underestimate the importance of education when it comes to launching a first-in-class drug with a new therapeutic modality. We will be educating on the crucial role of the antibody and MG, but also on the central role of FcRn in modulating Igg hemostasis. Our field force will be instrumental in reaching our target physicians. We have already hired an expansive team of medical research liaisons that specialize in the neuromuscular space. This team was crucial during our Phase III trial to be a resource for investigators. As we approach launch, they will continue to be a resource for an even broader community of neurologists. We additionally have a growing team of thought leader liaisons who build relationships with the top MG physicians and support our marketing efforts. We'll start to hire our sales force during the third quarter of this year and expect to have 70 to 80 representatives for our commercial launch. On slide 18, all of our preparatory work to successfully launch efgartigimod is ultimately about reaching patients who continue to suffer the effects of MG. We hear from patients about the severe and sometimes life-threatening symptoms of MG. As argenx continues to grow its presence within the MG community, we want to build awareness of the key unmet need that still exists. To accomplish this, we have launched a digital disease awareness platform in June called MG United, offering personalized information and resources for those affected by MG. This is the first of many initiatives that will be available to the MG community. We have also been working closely with the myasthenia gravis foundation of America to be available to patients during the COVID-19 pandemic. People living with MG already experienced feelings of isolation and the social distancing requirements only amplifies this. Given the number of COVID cases we continue to see we are planning for a fully virtual launch if necessary. We are grateful that we have had time to acclimate and learn from virtual interactions with each of our key stakeholders. And think that this will help us prepare for a successful launch in any setting.

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

Eric Castaldi -- Chief Financial Officer

Thank you, Keith. Slide 19 covers our half year 2020 operating results, which are detailed in today's press release and regulatory filings. Total operating income for the six months ended June 30, 2020, was EUR31.1 million, a decrease of EUR20.2 million from the same period in 2019 due to a milestone payments we received last year under the AbbVie collaboration agreement, and partially offset by the revenue recognition of the transaction price related to the Janssen collaboration and an increase in other income driven by higher payroll tax rebates. R&D expenses for the six months ended June 30, 2020, were EUR171.7 million compared to EUR78.3 million for the same period in 2019. Selling, general and administrative expenses were EUR61.6 million for the six months ended June 30, 2020, compared to 27.5% sorry, EUR27.5 million for the same period in 2019. This increases in R&D and SG&A expenditures over the prior year 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 also the recruitment of additional employees to support ongoing activities. We expect operating expenses to continue to increase this year as we further advance our pipeline and prepare for future commercialization.

For the six months ended June 30, 2020, financial expenses, which primarily relates to interest received and changes in fair value of current financial assets amounted to EUR2.2 million compared to a financial income of EUR7.2 million for the same period in 2019. Exchange gains totaled EUR0.2 million for the six months period ended June 30, 2020, compared to EUR2.5 million for the same period in 2019. The total net loss for the six months ended June 30, 2020, was EUR205.6 million, compared to a net loss of EUR45.1 million and an operating loss of EUR54.5 million for the same period in 2019. We ended the first half of 2020 with EUR1.9 billion in cash, cash equivalents and current assets, compared to EUR1.3 billion on December 31, 2019. The increase was primarily due to the closing of a global offering including the U.S. offering and European private placements, resulting in the receipt of EUR730.7 million net proceeds in June 2020.

I will now turn the call back to Tim.

Tim Van Hauwermeiren -- Chief Executive Officer

Thank you, Eric. Before we open up the call for questions, I would like to turn to slide 20. We are very excited by what is ahead of argenx. We are focused across the company on the filing of our first BLA and the launch of our first drug in the United States. As we shift to be a commercial organization, we are committed to further building out our differentiated pipeline of antibody therapies, both by advancing our ongoing clinical trials as quickly as possible and by identifying new value creation opportunities through our immunology innovation program. With a cash position of EUR1.9 billion and a strong and rapidly expanding team, we know we are in a poll position to execute our business plan to generate value for our shareholders in the long term. We continue to be inspired by the resilience and hope of our patients and believe we are closer than ever to reaching them through our commitment to immunology innovation.

With that, I will now ask the operator to open the call for your questions.

Questions and Answers:

Operator

[Operator Instructions] Question, it's from the line of Derek Archila from Stifel. You may ask your question.

Bill -- Stifel -- Analyst

Hi, Bill [Phonetic]on for Derek. Thanks for the update and taking the questions. So just on cusatuzumab, can you just remind us whether or not the update has any impacts on the terms of the deal with J&J? And then sort of on the Phase Ib, can you talk a little bit about how in the evolving landscape of AML, you sort of think the bar will be in the combination study with

Tim Van Hauwermeiren -- Chief Executive Officer

Thank you for the question, and thank you for being with us today. So the strategy change, which we announced today is not affecting by means the terms of the deal. Actually, the way you have to look at the global development plan, which is an intrinsic part of the contract, is that there is nothing else than a decision tree, which we can navigate based on data. So with this new data point from coming in, we know that in our strategy, we have to give a priority to the Phase Ib study where we combine with what is now likely going to be the future standard of care. So where is the bar? Well, we know that VIALE-A had a 37% CR rate and a 15-month overall survival, which is a benefit of about five months compared to Vidaza alone. And while venetoclax Vidaza has shown strong data to induce CRs, the question remains how you can keep people in a stable remission. So the bar to be beaten will not just be in terms of CR rates, but also in the durability of the CRs and the safety of the combination.

Bill -- Stifel -- Analyst

Thanks.

Operator

Thank you. You next question is from the line of Yaron Werber from Cowen. You may ask your question.

Yaron Werber -- Cowen -- Analyst

Hi, thanks for taking the question. So maybe a couple of questions on the subcu bridging study and the strategy. I mean, as you noted, you're going to be meeting with FDA in Q4. And both to advance it sort of in ITP, but also importantly, obviously, in MG, and the MG landscape as expected it's going to be a big market. There's a few competitors coming in, talking about subcu dosing. In those cases, some potentially are going to be looking at sort of fixed interval subcu doses chronically. So thoughts about that? And how do you bridge from your intermittent dosing to subcu? And is there a chance that subcu is going to be fixed or is that going to be intermittent?

Tim Van Hauwermeiren -- Chief Executive Officer

Thank you, Yaron. Thank you for being with us today. Keith, would you like to take this question, please?

Keith Woods -- Chief Operating Officer

Sure. Thank you. As we noted, that we will go meet with the FDA and discuss the bridging strategy for MG. We also are bringing subcu board in ITT and additionally, it's the preferred in CIDP administration. In regard to the exact treatment regimen that we will use in MG, we'll comment more on this after we have had our meeting with the FDA. But as you know, from the ADAPT study, we do have individualized dosing. And it varies among our various patients. So I do see the possibility with our subcu of not only being able to use it on an individualized treatment basis, but some might be on a more fixed dose.

Yaron Werber -- Cowen -- Analyst

And do you have a sense yet the MG strategy what the FDA might require, obviously, they're going to look at PK, but they're going to want to look at some PD efficacy. Is it possible to do a bridging study that's got a primary endpoint at eight weeks? And maybe run a 24-week study, and that's sufficient for approval?

Keith Woods -- Chief Operating Officer

Yes, I still think it's too early for us to comment on exactly what they are going to require. But I think it's fair to say that we will need some exposure in MG patients. But let's wait and see until we hear back from the FDA.

Yaron Werber -- Cowen -- Analyst

Great, thank you.

Operator

Thank you. The next question is from the line of Yatin Suneja from Guggenheim. You may ask your question.

Yatin Suneja -- Guggenheim -- Analyst

Congrats on all the progress. Just on the CIDP trial, number one, could you just comment on your expectation, given that, I think the data might be coming, hopefully, sometime next year. How much disclosure will you make, when you make the decision to expand it? And then also, if you can comment on the relative size of CIDP in the current use of IVIg in MG versus CIDP, just to give a sense of how big that opportunity might be.

Tim Van Hauwermeiren -- Chief Executive Officer

Thank you, Yatin. Thanks for being with us today. So we realized that the go or no go decision point to expand the Phase II study into a registrational study is a very significant data point for our shareholders and investors. So we plan to make that decision public. And also give some view on the data. We now guide the data point is going to come in, in 2021. This study is enrolling. And actually, we're opening sites at a pretty high pace, but it's a demanding protocol. In terms of relative size, we think that CIDP is likely representing one of the bigger markets for efgartigimod. If we simply look at the chronic nature of the disease and the life long nature of the disease and the reliance mainly on IVIG, CIDP is basically a lifelong sentence to IVIg, then we think that this is going to be one of the more substantial markets. Remember that the IVIg sales in CIP, just in the United States, on an annual basis is exceeding EUR1.5 billion.

Yatin Suneja -- Guggenheim -- Analyst

Okay. And just maybe quickly on the financial side. Can you just help us with the spend going forward, I saw the R&D coming down a little bit in the quarter? Just help us understand how model the expenses G&A is picking off.

Tim Van Hauwermeiren -- Chief Executive Officer

Eric, would you like to take this question, please?

Eric Castaldi -- Chief Financial Officer

Sure, absolutely, yes. So indeed, there is a significant increase in our operating cost, as I said. And basically, we are not giving any guidelines on the cash burn, but what we can say is that we expect, as we continue to advance our late-stage pipeline that the costs continue to go up quarter-over-quarter.

Operator

The next question is from Jason Butler from JMP Securities.

Jason Butler -- JMP Securities -- Analyst

Hi, thanks for taking the question. Just had another one on cusa. Can you maybe talk about the any of the safety data you have from CULMINATE? And I guess that in addition to from a mechanistic perspective, how you think about the safety and tolerability in context of a triple combo with venetoclax? And then again, in terms of CULMINATE, is there enough data there to look at molecular subgroups or other biomarkers? Or do biomarkers play into your strategy at all at this point?

Tim Van Hauwermeiren -- Chief Executive Officer

Thank you, Jason. These are two great questions. So on the safety side, what we say today is that while we're going to disclose, of course, more detailed data early 2021. We can say that the safety profile we observed in CULMINATE is consistent and in line with the earlier safety data. So the safety profile of cusa continues to look very promising. And this is important because you're absolutely right. The combination comes with some toxicity. And while it's very important inducing CRs, the question is, how do you keep patients in CR. So safety is going to be a key aspect in any future combination going forward with what we think could be the future standard of care, which is

With regards to it's too early to comment on it, but it is possible. Of course, within AML, we have a very clear view on risk classification, cytogenetics, some biomarkers. So we will, for sure, try to further stratify the data sets coming out of CULMINATE, but we will have to be a little bit patient here because these data are, of course, still maturing.

Jason Butler -- JMP Securities -- Analyst

Okay, great, that's helpful, thanks for taking the questions.

Tim Van Hauwermeiren -- Chief Executive Officer

Thanks, Jason.

Operator

Thank you. Our next question is from Akash Tewari from Wolfe Research.

Akash Tewari -- Wolfe Research -- Analyst

First on efgartigimod. Just had a question there. Would the FDA allow you to run a basket trial for indications that are predominantly driven by pathogenic IGG, but may have low prevalence, for example, there was syndrome or syndrome could you possibly do this in larger indications as well?

Tim Van Hauwermeiren -- Chief Executive Officer

This is a good question, and it's a question which we entertain internally in the company. We believe that after having proven the concept a number of times in the current indications where we're playing, we will be in a position to turn around and have that conversation with the FDA. I think, especially for indications, which are very high unmet need clearly mediated by pathogenic IgGs and probably too small or unethical to do a placebo-controlled or controlled randomized study. So this is something which we have on our regulatory to-do list. But we believe that the time is only right to do that even when we have established proof-of-concept a number of times.

Akash Tewari -- Wolfe Research -- Analyst

Great, thank you.

Operator

Thank you. You next question would be Matthew Harrison for Morgan Star.

Max Skor -- Morgan Star -- Analyst

This is Max Skor on for Matthew Harrison. Just a quick question regarding the CIDP delay, do you view this primarily as related to COVID 19? Or are a lot of these patients hesitant to complete a wash-out period and also, could you talk about how you're thinking about the timing around the European application for efgartigimod?

Tim Van Hauwermeiren -- Chief Executive Officer

I will take the first question on CIDP, and then I will hand over to Keith on the European registration. But this is a good question, Max. Thank you. The CIDP timeline is totally driven by COVID-19. So the level of enthusiasm we see for the drug candidates, its mode of action and for the protocol remains high. We do not see any issues in getting site enthusiastic about the clinical trial of physicians. And I think the sites which are open, actually are successful in identifying and screening patients. So that does not seem to be the problem. I think the protocol is a workable protocol. It's mainly the COVID-19 situation, which is in play in the delay. Keith, would you mind addressing the European registration path question?

Keith Woods -- Chief Operating Officer

Sure, happy to, Tim. Well, first of all, our priority, as you know, is the U.S. and then Japan. We currently are in the process in the final stages of hiring a European GM, and we are outlining our strategy in Europe. This will likely be a staged approach as we determine the process of approaching the EU big 5, but also how we will expand beyond there. We have the opportunity to expand our supply chain to accommodate the additional geographies. The bottom line is, internally, we are working toward an EMA submission.

Max Skor -- Morgan Star -- Analyst

Great, thank you.

Operator

Thank you. Our next question is from the line of Joon Lee from SunTrust.

Joon Lee -- SunTrust -- Analyst

If so, when can we put an update there? And I have a follow-up.

Tim Van Hauwermeiren -- Chief Executive Officer

Could you repeat the question because we missed the first part of the question, you were probably still on mute.

Joon Lee -- SunTrust -- Analyst

Okay. So cusatuzumab, CD70 is becoming a very popular target And others are targeting CD70 for solid tumors and T-cell malignancies. So do you or J&J have plans to expand beyond AML? And if so, when can we expect an update there?

Tim Van Hauwermeiren -- Chief Executive Officer

Yes, I think you're absolutely right in the fact that CD70 is on the radar screen. In solid tumors, we do know that CD70 is often heavily over expressed, but we don't understand the disease biology, which is involved in that. That is the big difference with the leukemias, which called out because there, thanks to the work of Professor from the Hospital, we do understand the involvement of the CD70, CD27 pathway in the survival and proliferation of leukemic stem cells. Remember that we also ventured into T-cell lymphoma at the start of the program, and we did dose escalation in Phase I, we did see some pretty spectacular responses in T-cell lymphoma, and we did do an expansion cohort in T-cell lymphoma. We achieved about a 30% overall response rate. We saw very long responses in T-cell lymphoma. But basically, we were judging at that point in time that this was insufficient to take the molecule forward in T-cell lymphoma. In general, lymphomas are part of the Janssen global development plan, but they will clearly follow in sequence after the work we plan to do in AML and So these two indications are prioritized in the global development plan, OK?

Joon Lee -- SunTrust -- Analyst

So your indications outside of lymphoma and AML are yours to control?

Tim Van Hauwermeiren -- Chief Executive Officer

We have not been specific on that in the global development plan. I think what we said in public is first is AML and high-risk MDS, then is the potential to venture into lymphomas and other indications, but we have not said anything specific about solid tumors.

Joon Lee -- SunTrust -- Analyst

Great. Okay. So just another question for your 117 study in COVID-19, how many patients do you need to treat to get comfortable around efficacy? Because others have treated as little as 10 patients with COVID-19 and got sufficient to move into a pivotal trial. So what's your bar for advancing in COVID-19 Rs?

Tim Van Hauwermeiren -- Chief Executive Officer

Remember that this is a Phase I study. So we have never been in human subjects with 117 before. So actually, we need to do two things in this Phase 1. The first thing we need to do is do escalate and establish the right dose. That means that those which is completely knocking out C2, and then we need to establish signs of efficacy. So think of a number of patients which would be typical for a classical dose escalation. Although the regulator allows us to dose escalate in somewhat bigger steps given the urgency of the situation. But then you're right, I mean, in order to establish activity or an evidence of activity, you're talking about a similar number of patients, around 10.

Joon Lee -- SunTrust -- Analyst

Okay, thank you.

Operator

Thank you. Our next question is from the line of Tazeen Ahmad.

Tazeen Ahmad -- BofA Merrill Lynch -- Analyst

Good morning. That's already been asked, just let me know. Tim, maybe on pricing for MG. Can you just adjust a general range of what payers are I'm saying that they would be receptive to, at this stage, you've always said that you would be very competitive with the current market and how you want to price efgartigimod for MG? And as a point of comparison, can you give us an idea of how much annually at cost per patient in the U.S. to take IVIg? And then I have a follow-up on CIDP.

Tim Van Hauwermeiren -- Chief Executive Officer

Thank you. Keith, why don't you go ahead and you take a question on pricing and the annualized cost of IVIg in MG, and then I will probably take on the next question, OK?

Keith Woods -- Chief Operating Officer

Okay. That sounds good. As you know, we are doing the homework on two fronts. First of all, is the current market dynamics and also the value that efgartigimod can bring to the MG patients. You know that at the high end of the spectrum in U.S., we have Soliris with a price tag of about $700,000 a year. We've learned from chronic IVIg patients that the annual therapy for them is around $140,000 a year. So there's a lot of flexibility in pricing with MG, but we also want to make sure that we are responsible as efgartigimod being a pipeline and a product.

Tim Van Hauwermeiren -- Chief Executive Officer

Tazeen, do you have a second question, please?

Tazeen Ahmad -- BofA Merrill Lynch -- Analyst

Oh, I'm sorry. I wanted to just also ask you about CIDP. How is this indication potentially different in terms of the heterogeneity of the patient population, let's say, relevant to MG? And how does that make the challenge of determining if it's worth moving forward in this indication, viable or not. And then secondly, let's say, another company is able to get some market before you for CIDP, if you do choose to move forward, how much is where you would be in the competitive landscape in terms of when you would enter the market going to be a decision in deciding whether to move forward in that indication or not?

Tim Van Hauwermeiren -- Chief Executive Officer

Well, you know Tazeen that CIDP is a big indication with very limited tools in the therapeutic toolkit. So a CIDP patient today would be mainly treated with steroids and IVIg. There's not much other optionality out there. So even if there would be a couple of players entering this space, I think the space is pretty much wide open. You are right in pointing out the heterogeneity for CIDP, which is true by the way for so many automine indications. And I think some of the confusion comes from the fact that certain people which are labeled as a CIDP patients, and of being prescribed IVIg as being CIDP patients or maybe not CIDP patients after all. That's something which we learned from the homework we did when we were designing the Phase III trial. And that's why we also bought out the concept of having an independent board of CIDP specialists which validates the diagnosis CIDP before the patient can actually enroll the trial.

So we need to read out non CIDP patients from the trial to make sure that we are effectively treating CIDP. And then indeed, you see that within CIDP, there are different subsets of patients, if you would try to classify them based on the nature and identity of the autoantibody. Now we believe that all these true CIDP patients do have auto antibodies of the IgG type as was evidenced in the R&D day by means of the plasma exchange and more importantly, the immuno absorption data. And that is the beauty of efgartigimod. It does not matter where your autoantibody binds or what it does as long as it is an IgG molecule, we will clear it with mode of action. So I think with the 30 patients go in or go decision point, we will have a pretty clear handle on what is the likely subset of patients in which we can play whether this heterogeneity is playing a role at all if you try to treat them with efgartigimod.

Tazeen Ahmad -- BofA Merrill Lynch -- Analyst

And then in general, Tim, is there anything that makes it difficult to enroll CIDP patients? It does seem that, for example, your competitor, UCB did also said their trial has been delayed. Is it COVID related or are there other issues?

Tim Van Hauwermeiren -- Chief Executive Officer

Well, we cannot speak for somebody else's trial, but what we experience is it's really COVID. We try to enroll patients in Japan, Europe and United States. This is already global from the get-go. And what you see is that really on a country-by-country and even side-by-side basis, COVID has kept the medical community very busy. So I think we are now really ramping up a number of sites, which we're opening. And as I said before in the call, those sites which are open, actually don't find it difficult to identify patients and screen patients. So we're pretty optimistic that if COVID remains under control, that's a big if, then these sites which we are opening will be successfully enrolling the trial.

Tazeen Ahmad -- BofA Merrill Lynch -- Analyst

That makes sense. Thanks.

Operator

Thank you. Our next question is from the line of Graig Suvannavejh. You may ask your question.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Can you hear me OK?

Tim Van Hauwermeiren -- Chief Executive Officer

Yes, we can.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Hi, thanks for taking the question. Okay. Great. I've got two questions, please, and they're all around efgartigimod. Just first, in the myasthenia gravis Phase III study, you talked about a 40% minimal symptom expression. I just wanted to ask a question about that. We've done some work with KOLs who said in their personal opinion, while 40% is good, they might have been hoping that for maybe 50% or 60% would be perhaps something that would be better. So can you put the 40% MS in context. So just wanted to get some color on that. And then the second question I have is with the Phase III data behind you and as we look at next efgartigimod data events, given COVID-19, are you able to provide us with at least current expected time lines on your various readouts, whether they be next data sets and ITP, pemphigus and CIDP?

Tim Van Hauwermeiren -- Chief Executive Officer

Thank you for these two great questions. I will give the first question to Keith in a minute to contextualize the 40% of minimum symptom expression because, of course, we have been very busy learning about our data from the community. But on your second question, no matter how much I would like it. It is not possible yet to give you clear guidance on when exactly these studies are going to read out for the simple fact that covet is not gone. I think we're still battling covets a big time in the United States. Let's touch wood. But for the moment, in Japan and big parts of Europe, it seems to be under control. But now we'll be looking at the second wave of COVID, which is approaching us. So it's pretty difficult to give you any reliable forecast on when exactly these studies would read out. But I hope you agree with me that today just like we did in the Q1 call, we tried to give you a fully transparent look on the studies and where we are. And actually, we will continue to do that in the next quarters so that we can keep you closely abreast of the covet situation. With that being said, Keith, would you mind contextualizing the 40% minimum symptom expression, please?

Keith Woods -- Chief Operating Officer

Sure. Happy to. Actually, when we've shared this data with our investigators and with other physicians in market research, they've been impressed with the 40% and found it quite compelling because this is so meaningful to patients. I also want to remind you that this was a measurement after one cycle. So this was four doses of efgartigimod, and we obtained that 40% MSC. We'll continue to look at it in subsequent cycles and see where the numbers go from there. But we were quite encouraged that after only four doses to have that type of MSC number.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Okay. Keith. And just one follow-up, Tim. Just on your comments, I appreciate that it's very difficult to give guidance on the timing of the readouts. But maybe given your visibility into where your studies are, is there perhaps one of those studies that is closer to being fully enrolled, where that might give an indication of kind of what could be next, even though you might not be able to provide exact timing?

Tim Van Hauwermeiren -- Chief Executive Officer

No, we're not in a position to give any comment on that. And I also don't think it would be appropriate. I think we need to continue to work hard on enrolling the trials. And then look for reasonable updates in the next quarters to come.

Operator

Our next question is from the line of Sandra Cauwenberghs from KBC Securities.

Sandra Cauwenberghs -- KBC Securities -- Analyst

Hi, thanks for taking the question. I still have one small question left. It's more around it's for clarification with regard to the cusatuzumab follow-up trial. So what I understood is that you will do a triple combination, but I want to understand, will you be able to generate some data on a double combination of in terms of safety data, adverse events popping up on the combination of these in particular?

Tim Van Hauwermeiren -- Chief Executive Officer

You're right, Sandra. There are two studies going on right. I mean one is the couplets or the doublet as people call it. And then we have the triplet. So these two studies are running in parallel. So we will actually be able to pick up any differences between the two treatment regimens if they would exist.

Sandra Cauwenberghs -- KBC Securities -- Analyst

Okay, thanks.

Tim Van Hauwermeiren -- Chief Executive Officer

Thank you.

Operator

[Operator Closing Remarks]

Duration: 64 minutes

Call participants:

Beth DelGiacco -- Vice President of Investor Relations

Tim Van Hauwermeiren -- Chief Executive Officer

Keith Woods -- Chief Operating Officer

Eric Castaldi -- Chief Financial Officer

Bill -- Stifel -- Analyst

Yaron Werber -- Cowen -- Analyst

Yatin Suneja -- Guggenheim -- Analyst

Jason Butler -- JMP Securities -- Analyst

Akash Tewari -- Wolfe Research -- Analyst

Max Skor -- Morgan Star -- Analyst

Joon Lee -- SunTrust -- Analyst

Tazeen Ahmad -- BofA Merrill Lynch -- Analyst

Graig Suvannavejh -- Goldman Sachs -- Analyst

Sandra Cauwenberghs -- KBC Securities -- Analyst

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