Truist Securities keeps Buy rating on argenx after trial failure, 'We believe the stock reaction is overdone'

Truist Securities analyst Danielle Brill reiterated a Buy rating and a $1,095.00 price target on argenx SE (NASDAQ: ARGX) after the company discontinued its Phase 3 clinical trial for Sjögren's disease.

Argenx announced the discontinuation of the trial evaluating efgartigimod following a failed interim futility analysis. Shares of argenx fell approximately 13% following the announcement, closing at $928.44.

Brill said the discontinuation has no impact on the firm's financial model, noting the Sjögren's program was never incorporated into Truist's valuation. "While the outcome is disappointing, particularly given the sizeable commercial opportunity and potential value inflection from topline data previously expected in 2H27, we do not view the result as entirely surprising," Brill said.

The analyst attributed the complexity of Sjögren's disease, described as a heterogeneous systemic autoimmune disease involving multiple immune pathways, as a challenging indication for the targeted FcRn mechanism used by efgartigimod.

Alongside the Sjögren's discontinuation, argenx reported positive Phase 2 data for FB102 in celiac disease, with management announcing plans to advance the asset into Phase 3 development. Brill noted that while celiac disease is unlikely to be a near-term value driver, the program adds long-term optionality.

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