argenx award write up

2016 European Therapeutic Antibody Engineering

Technology Innovation Award

2016

EUROPEAN THERAPEUTIC ANTIBODY ENGINEERING

TECHNOLOGY INNOVATION AWARD

2016

BEST PRACTICES RESEARCH

© Frost & Sullivan 2016 1 “We Accelerate Growth”

Contents Background and Company Performance ........................................................................ 2

Industry Challenges .............................................................................................. 2

Technology Attributes and Future Business Value ..................................................... 3

Conclusion........................................................................................................... 5

Significance of Technology Innovation .......................................................................... 6

Understanding Technology Innovation .......................................................................... 7

Key Benchmarking Criteria .................................................................................... 7

Best Practice Award Analysis for argenx N.V. ................................................................. 7

Decision Support Scorecard ................................................................................... 7

Technology Attributes ........................................................................................... 8

Future Business Value ........................................................................................... 8

Decision Support Matrix ........................................................................................ 9

The Intersection between 360-Degree Research and Best Practices Awards ..................... 10

Research Methodology ........................................................................................ 10

About Frost & Sullivan .............................................................................................. 10



Background and Company Performance

Industry Challenges

The impact of monoclonal antibodies (mAbs) across the therapeutics and diagnostics space has increased significantly over the past decade. Numerous types of mAbs have received regulatory approval from organisations such as the US FDA for use in the treatment of diseases such as cancer, autoimmune disorders, cardiovascular disease as well as more recently for infectious disease and asthma. Every year, there is an increase in the number of mAbs that are under development across drug pipelines at large and small pharmaceutical companies, as well as a handful of biotechnology companies specialising in a specific disease area.

However, there is a precursor step towards the discovery of therapeutic antibodies; this step involves the usage of a technology platform that enables the production of various types of monoclonal antibodies. Humanized monoclonal antibodies form the platform technology that can be designed against target antigens that will enable them to be used for a specific indication. Chimeric antibodies were developed using a combination of mouse variable domains and human domains. These antibodies were then further humanized using an approach where the complementarity determining regions (CDRs) were grafted on human framework regions from the mouse monoclonal antibodies. Though there was a high level of primary sequence homology, there was a possibility of ending up with a hypervariable loop that does not sustain a human like structure due to the lack of canonical fold combinations in the mouse CDRs’. As there are a substantial number of mutations that need to be engineered to get these antibodies to achieve the required level of homology, the procedure is very time consuming and complex, naturally making it more cost ineffective. In the process of making so many mutational changes, the potency and affinity of the antibodies also gets negatively impacted.

To combat the issue of chimeric antibodies, fully human monoclonal antibodies were developed. However, these tend to also have a drawback, as the selection is done from antibody libraries (that is, synthetic combinatorial or non-immune) which acts as a limiting factor considering the natural diversity present. As there are no in vivo selected CDRs, affinity maturation needs to be carried out, a process which is extremely time consuming and can delay and prolong antibody discovery. When developing fully human platforms, transgenic mice are typically used; these are highly inbred, which can impact the antibody response range. To overcome all these different technical challenges and limitations associated with humanized and fully human monoclonal antibodies, the company argenx N.V. (argenx) has developed a “humanized” monoclonal antibody platform that enables the production of high affinity antibodies.



Technology Attributes and Future Business Value

Industry Impact

argenx has developed a “humanized” monoclonal antibody platform that tries to overcome all the major shortcomings of the other conventional monoclonal antibody platforms available at present. The technology platform developed by argenx is called the SIMPLE AntibodyTM platform. It can be used as the very first step by scientists to develop therapeutics antibodies. Using this antibody platform, the production of antibodies with high specificities and affinities for a plethora of different target antigens can be achieved. This is critical for a successful antibody-based therapeutic treatment, as the humanized capacity of such antibodies can minimise the immunogenicity of the drug in the patient. The company is focused on developing a host of unique therapeutic antibodies for disease areas where there is a lack of treatment options. Cancer is one of the main areas of focus for argenx, as the success of antibodies has already been demonstrated in this indication through therapeutic classes such as cancer immunotherapies.

The company has developed some leading drug candidates in this space such as ARGX-110, a SIMPLE AntibodyTM specifically used for T-cell lymphoma (TCL), renal cell carcinoma, ovarian cancer, and mesothelioma. ARGX-110 has presented rather promising safety profiles in these cancer indications. However, the company is focusing the capabilities of ARGX-110 mainly for TCL and nasopharyngeal carcinoma (NPC). The next leading drug candidate in argenx’s pipeline is ARGX-111 which is mainly being developed for MET-amplified cancers. ARGX-115, which is jointly being developed with Abbvie, is also a leading drug product for a range of cancer indications. ARGX-113 is a pipeline product developed by argenx which is only being used for the treatment of autoimmune disorders, specifically orphan diseases such as systemic lupus and myasthenia gravis to name a few.

Product Impact

argenx has developed its proprietary antibodies by assessing the VH and VL domains found in the Camelidae represented a high level of homology to the VH and VL domains that were present in human antibodies. Unlike chimeric antibodies, an extensive structural homology is present between the hypervariable loops of the VH and VL domains found in camelids and the ones found in humans. These rather surprising yet unique aspects of conventional antibodies from the Camelidae family have allowed argenx to adopt them for being engineered into therapeutic antibodies. argenx has thus sourced the V regions of llamas that have been outbred to generate immune responses against a range of different targets. Unlike the inbred transgenic mice, the diversity of the llamas will provide the antibodies with a high level of epitope coverage. Due to the nature of the llamas’ immune system, a whole range of antibodies can be discovered for a myriad of target epitopes, even for highly complex targets.

The technology platform developed by argenx has successfully been covered by granted patents. The company’s intellectual property covers its lead ARGX-110 and ARGX 111



drug candidates. The company has been granted composition of matter patents for ARGX-100 which is a SIMPLE AntibodyTM designed to target CD70. argenx has also been granted patent for ARGX-111, a SIMPLE AntibodyTM that targets c-MET. The projection for patent expiry is currently around 2032 with a five year Patent Term Extension which will extensively aid in marketing the future drug candidates developed by argenx.

Visionary Innovation

A visionary innovation by argenx that will result in the development of better antibodies is the development of a series of Fc engineering complementary technology platforms such as NHance®. This proprietary approach is associated with specific mutations that are present in the Fc region of the antibody. NHance® has the potential to prolong a typical half-life. The immunogenicity and the ease of manufacturing the antibodies are not disrupted, ensuring that there are no adverse effects due to the application of the NHance® approach. NHance® is beneficial, as it can reduce the dosage requirements for the patient due to the prolonged half-life, making the entire treatment more cost-effective and time saving. As it also enables better tissue distribution and capacity to be delivered across mucosal barriers, it is likely that treatments suitable for a variety of administration methods can be developed, giving patients a choice of delivery routes.

The ABDEGTM technology focuses mainly on a known mechanism that enhances immunoglobulin G (IgG) recycling. Through re-engineering the Fc region of IgG, the activity of the neonatal Fc receptor (FcRn) that gets bound to the IgG can have a higher affinity and a lack of pH dependence on FcRn. This results in an inhibitory reaction reducing the IgG levels. This becomes highly effective when utilised in diseases that are mediated through IgG levels. This way, IgG can be cleared from the patient through the antibodies that are developed to treat them.

Application Diversity

The growth of antibody therapeutics has resulted in a rapid expansion of clinical research across various indications. Companies are spending millions of dollars in testing and developing antibody therapeutics for CNS disorders, different types of cancer, and autoimmune diseases. argenx is leveraging its unique SIMPLE AntibodyTM technology platform for the development of novel antibody treatments across autoimmune diseases, cancer immunotherapy, and cancer metastasis. The company is currently developing specific drug candidates such as ARGX-113 for myasthenia gravis, by targeting the FcRn site, ARGX-110 for cancer immunotherapy for solid tumors and blood cancer which specifically targets CD70 pathway, and ARGX-111 which is also for solid tumors and blood cancer, however targeting c-MET. All three of these drug candidates are still in early pipeline phase development. The company through its joint-risk business model is also developing a host of therapeutics using its proprietary technology. Through its partnered projects, the application area has been expanded from cancer immunotherapy and autoimmune diseases to cover skin inflammation as well.



Technology Licensing

The company has some high-profile partnerships with leading pharmaceutical companies. It is using a joint risk model to develop antibody therapeutics with Abbvie, Leo Pharmaceuticals, Shire, and Bayer. Moreover, argenx has developed a unique business model called the Innovative Access Program (IAP). Through IAP, argenx has been pushing the frontiers in the space of cancer immunotherapy. It has been working closely with academic experts at the Universite Catholique de Louvain/de Duve Institute. This collaboration has led to the discovery of novel immune checkpoint targets around for which argenx has acquired some patents.

AGRGX-115, which is the first successful drug candidate being developed through this program, is positioned in the space of cancer immunotherapy. This drug candidate is being developed jointly with Abbvie and is currently in preclinical development stage. The partnership allows argenx to combine ARGX-115 with its own monoclonal antibodies, as a focused study on GARP-targeted products.

Financial Performance

argenx is positioned to be financially well placed. It currently has a very robust cash position with close to €54.3 million in cash as of March 2016. It also raised €30 million in June 2016 through private placement and €35 million in April 2016 with its collaboration on ARGX-115 with Abbvie. Based on its progress as well as the revenue from its multiple partnerships, argenx has estimated future revenue of close to €2 billion.

Conclusion

argenx is a biotechnology company focused on improving the therapeutic qualities of human antibodies through its proprietary antibody discovery platform SIMPLE AntibodyTM. Frost & Sullivan’s independent analysis clearly shows that SIMPLE AntibodyTM enables the company to surpass conventional antibody discovery platforms by aiding in the development of antibodies with higher affinities and specificities. The application diversity of the platform allows it to develop a whole host of antibodies for different types of cancer and a range of autoimmune disorders. The company has garnered multiple patents with IP protection that will last until 2032, ensuring that it is able to market the products developed from this discovery platforms effectively. The superior quality of the SIMPLE AntibodyTM platform and the capabilities of the antibodies which have been developed using it have enabled argenx to forge high-profile partnerships with leading pharmaceutical companies that will ensure substantial financial revenue for the company in the coming years.

For its strong overall performance, argenx N.V. has earned Frost & Sullivan’s 2016 Technology Innovation Award.



Significance of Technology Innovation

Ultimately, growth in any organization depends upon finding new ways to excite the market, and upon maintaining a long-term commitment to innovation. At its core, technology innovation or any other type of innovation can only be sustained with leadership in three key areas: understanding demand, nurturing the brand, and differentiating from the competition.

Understanding Technology Innovation

Technology innovation begins with a spark of creativity that is systematically pursued, developed, and commercialized. That spark can result from a successful partnership, a productive in-house innovation group, or the mind of a singular individual. Regardless of the source, the success of any new technology is ultimately determined by its innovativeness and its impact on the business as a whole.



Key Benchmarking Criteria

For the Technology Innovation Award, Frost & Sullivan analysts independently evaluated two key factors—Technology Attributes and Future Business Value—according to the criteria identified below.

Technology Attributes Criterion 1: Industry Impact Criterion 2: Product Impact Criterion 3: Scalability Criterion 4: Visionary Innovation

Criterion 5: Application Diversity

Future Business Value Criterion 1: Financial Performance Criterion 2: Customer Acquisition Criterion 3: Technology Licensing Criterion 4: Brand Loyalty Criterion 5: Human Capital

Best Practice Award Analysis for argenx N.V. Decision Support Scorecard To support its evaluation of best practices across multiple business performance categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool allows our research and consulting teams to objectively analyze performance, according to the key benchmarking criteria listed in the previous section, and to assign ratings on that basis. The tool follows a 10-point scale that allows for nuances in performance evaluation; ratings guidelines are illustrated below.

RATINGS GUIDELINES

The Decision Support Scorecard is organized by Technology Attributes and Future Business Value (i.e., the overarching categories for all 10 benchmarking criteria; the definitions for each criteria are provided beneath the scorecard). The research team confirms the veracity of this weighted scorecard through sensitivity analysis, which confirms that small changes to the ratings for a specific criterion do not lead to a significant change in the overall relative rankings of the companies.



The results of this analysis are shown below. To remain unbiased and to protect the interests of all organizations reviewed, Frost & Sullivan chooses to refer to the other key players as Competitor 2 and Competitor 3.

DECISION SUPPORT SCORECARD: TECHNOLOGY INNOVATION AWARD

Measurement of 1–10 (1 = poor; 10 = excellent)

Technology Innovation Technology Attributes

Future Business Value

Average Rating

argenx N.V. 9 9.5 9.25

Competitor 2 8 8 8

Competitor 3 8 7.5 7.75

Technology Attributes Criterion 1: Industry Impact Requirement: Technology enables the pursuit of groundbreaking new ideas, contributing to the betterment of the entire industry

Criterion 2: Product Impact Requirement: Specific technology helps enhance features and functionality of the entire product line for the company

Criterion 3: Scalability Requirement: Technology is scalable, enabling new generations of products over time, with increasing levels of quality and functionality

Criterion 4: Visionary Innovation Requirement: Specific new technology represents true innovation based on a deep understanding of future needs and applications

Criterion 5: Application Diversity Requirement: New technology serves multiple products, multiple applications, and multiple user environments

Future Business Value Criterion 1: Financial Performance Requirement: High potential for strong financial performance in terms of revenues, operating margins and other relevant financial metrics

Criterion 2: Customer Acquisition Requirement: Specific technology enables acquisition of new customers, even as it enhances value to current customers

Criterion 3: Technology Licensing Requirement: New technology displays great potential to be licensed across many sectors and applications, thereby driving incremental revenue streams



Criterion 4: Brand Loyalty Requirement: New technology enhances the company’s brand, creating and/or nurturing brand loyalty

Criterion 5: Human Capital Requirement: Customer impact is enhanced through the leverage of specific technology, translating into positive impact on employee morale and retention

Decision Support Matrix Once all companies have been evaluated according to the Decision Support Scorecard, analysts can then position the candidates on the matrix shown below, enabling them to visualize which companies are truly breakthrough and which ones are not yet operating at best-in-class levels.

DECISION SUPPORT MATRIX: TECHNOLOGY INNOVATION AWARD

High

Low

Low High

Futu

re B

usi

nes

s V

alu

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Technology Attributes

Competitor 3

argenx N.V.

Competitor 2



The Intersection between 360-Degree Research and Best Practices Awards

Research Methodology Frost & Sullivan’s 360-degree research methodology represents the analytical rigor of our research process. It offers a 360-degree-view of industry challenges, trends, and issues by integrating all 7 of Frost & Sullivan's research methodologies. Too often, companies make important growth decisions based on a narrow understanding of their environment, leading to errors of both omission and commission. Successful growth strategies are founded on a thorough understanding of market, technical, economic, financial, customer, best practices, and demographic analyses. The integration of these research disciplines into the 360-degree research methodology provides an evaluation platform for benchmarking industry players and for identifying those performing at best-in-class levels.

About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages over 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.

360-DEGREE RESEARCH: SEEING ORDER IN THE CHAOS

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