What happened
Argenx (ARGX 1.14%), a European biotech, is having a strong start to the week. Specifically, the drugmaker's shares were up by 28% on sky-high volume as of 11:52 a.m. ET Monday morning.
What's powering this double-digit rise in Argenx's share price? Ahead of the opening bell, the biotech announced positive top-line results for the registrational study known as Adhere. The study's goal was to evaluate Vyvgart Hytrulo (efgartigimod alfa and hyaluronidase-qvfc) in adults with chronic inflammatory demyelinating polyneuropathy (CIDP).
So what
CIDP is a rare immune-mediated peripheral nerve condition characterized by weakness and sensory dysfunction in the limbs. Vyvgart reportedly hit the trial's primary endpoint, demonstrating a significantly lower risk of relapse for patients taking the drug compared to those receiving a placebo. What's more, Vyvgart was well tolerated by patients in the study, according to the press release.
What's the big deal? This latest clinical victory adds support to Argenx's core value proposition centering around transforming Vyvgart into a franchise-level drug. Right now, the autoimmune med is Food and Drug Administration (FDA) approved for the rare neuromuscular disorder known as generalized myasthenia gravis, and it is also being trialed in several other high-value autoimmune indications.
Now what
Is Argenx's stock a buy on this news? With a market cap of over $27 billion following today's uptick, the biotech's shares are now trading at over 15 times Wall Street's most optimistic 2024 sales estimate.
That doesn't mean that Argenx's stock doesn't deserve such a rich valuation, but it's hard to imagine the stock pushing much higher in the near term in light of its enormous premium. Hence, it might be best to look for more fruitful opportunities elsewhere.
