Biotech company Argenx (ARGX -1.35%) is on a roll. Shares of the company recently soared by almost 30% in just one day. It owes these gains to great news from the clinic that could lead to a key approval down the road. That all sounds good, but while short-term gains are nice, investors with a much longer horizon should take the time to look at the totality of the business before deciding to press the buy button.

Let's look closer at Argenx and figure out whether buying its shares is worth it after the recent rally.

Argenx's crown jewel scores a win

Argenx focuses on developing therapies in the field of immunology. The company currently has just one product on the market, Vyvgart, which treats generalized myasthenia gravis (gMG). This is a rare, chronic, and potentially life-threatening disease that produces muscle weakness. On June 20, Argenx announced that the U.S. Food and Drug Administration (FDA) had approved Vyvgart Hytrulo -- the subcutaneous version of Vyvgart -- in treating gMG.

And on July 17, the biotech released more good news. In a study of Vyvgart Hytrulo in treating patients with chronic inflammatory demyelinating polyneuropathy (CIPD), a rare neurological disorder that causes weakness and sensory loss in the arms and legs, the medicine knocked it out of the park. Vyvgart Hytrulo showed a 61% decrease in risk of relapse compared to a placebo; it also demonstrated a reasonable safety profile, with only mild to moderate adverse events consistent with Vyvgart.

These positive results are what sent Argenx's shares through the roof.

A pipeline in a drug

Argenx is pinning much of its hopes on Vyvgart, a strategy that isn't unheard of for biotechs. Some drugmakers have made a fortune by relying primarily on just one medicine. Exelixis's cancer drug Cabometyx comes to mind, as does AbbVie's blockbuster drug Humira, which provided most of the company's revenue until it started running into generic competition.

After earning two approvals for Vyvgart (including the subcutaneous version of the medicine), Argenx could be inching closer to another one in CIPD. However, the company plans to add 11 indications after that; it estimates that Vyvgart could target well over a million patients across all these potential indications. That includes 16,000 and 65,000 patients in CIPD and gMG, respectively.

Is the stock worth it at current levels?

Argenx reported total revenue of about $281 million in the second quarter, a significant increase from the $85.2 million reported in the year-ago period. That was without Vyvgart Hytrulo, whose first vials were shipped in the U.S. in July, according to the company. So in all likelihood, revenue will continue expanding rapidly in the coming quarters.

The biotech is also making progress on the bottom line. Its net loss in the period came in at $94.4 million, significantly better than the loss of $208.8 million it reported in the second quarter of the previous fiscal year. What's more, Argenx had $2 billion in cash and equivalents as of the end of the second quarter, a slight decrease from the $2.2 billion it had at the end of 2022.

Since the quarter ended, Argenx used its soaring stock price to run a stock offering, which raised about $1.27 billion in gross proceeds.

So to recap, Argenx has an approved product on the market that is generating steady and growing revenue and could earn many more indications, a decent pile of cash to push its pipeline programs forward, and shrinking net losses. Argenx also has other products in its pipeline, although most are still in the early stages.

There's one problem: Argenx's market capitalization seems even more unreasonable after its recent run, at almost $30 billion. The company's prospects look promising, but its shares could drop like a rock at any sign of clinical or regulatory setbacks, especially if they're related to Vyvgart. And, of course, there's always the risk that over the long run, Vyvgart will fail to bag many of the regulatory approvals Argenx hopes for -- a typical risk with biotech stocks.

I believe investors should hold off on adding shares for now, and wait for a better entry point.