UBS Downgrades argenx SE (ARGX) to Neutral, 'It's a marathon not a sprint'

UBS analyst Xian Deng downgraded argenx SE (NASDAQ: ARGX) from Buy to Neutral with a price target of $570.00 (from $480.00).

The analyst comments "Following the positive CIDP trial readout published on July 17 (here), the stock rallied significantly (up 30% on the day and continued to drift up). The subsequent capital raise was oversubscribed with pricing ($490 per ADS) on par with July 17 close price, suggesting strong investor demand. Conversations with investors suggest the market is potentially pricing in M&A interest, especially as recent newsflow cited takeover interest is expected after CIDP results. Deals of similar size in the biotech space (they are relatively rare) have a rough range for acquisition price / peak sales of 3-6x. Even though we believe commercial uncertainties still remain for CIDP after positive data, this does not change our positive view on the megabuster potential of Vyvgart (we model $10bn peak sales) given its 12 pipeline indications. However, reverse NPV analysis suggests the current share price implies probability of success (PoS) of 75% for $7bn pipeline sales, versus blended UBS PoS at 57%. While this is possible to achieve, we prefer to reassess closer to next major catalysts (pemphigus readout due H2 and thyroid eye disease pivotal trial start due Q4) as most indications are in P1/2 stage. Therefore, we downgrade Argenx to Neutral."

For an analyst ratings summary and ratings history on argenx SE click here. For more ratings news on argenx SE click here.

Shares of argenx SE closed at $548.43 yesterday.

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