Specialist Biopharma Argenx just upsized its deal size

For a company that has not yet got any of its product on the market, Argenx Inc. is turning out to be quite profitable. The company has favorable returns, and its prospects in the market look good.

Argenx Inc. is a specialty treatment biopharmaceutical firm based in Breda, Netherlands. Argenx Inc. currently trades on the Euronext Brussels market under the ticker label ARGX. The company plans to list in the US stock market NASDAQ under the same label.

If you are not familiar with the works of the Breda-based firm, here is a little information to get you up to date. When Argenx began its operations in 2008, it launched into researching treatments for rare diseases and cancer. Most biopharma companies that research cancer usually take differentiated but similar approaches to developing drugs. For example, one company will work on making cancer treatment intravenous while another will try to make it oral. Most of the time these two companies will be working on the same drug but in different forms. The Argenx approach to drug development is a bit different. The firm engineers compounds for cancer treatment using technology and an analysis of llama DNA. Argenx also applies the same take in developing drugs to fight rare autoimmune disorders such as MG.

At present Argenx Inc. is still in its clinical trials phase. Many of its product candidates are either in their safety testing or proof-of-concept phases. These products include the ARGX-111, -113, -115 and -116.The ARGX-111 and -115 are cancer treatment prospects whereas the -113 and -116 will hopefully be used to treat autoimmune diseases in future. So far Argenx has funded the research for these potential medical and commercial use drugs from proceeds from its EBR trading as well as from milestone deposits from its partners. AbbVie Pharmaceuticals, one of Argenx’s partner firms, issued the company with a multimillion dollar grant when the company successfully got its ARGX-113 drug candidate through Phase 1 testing. Similarly, Broteio Inc. purchased rights to develop the ARGX-116. Argenx will get steady income in the form of royalty if Broteio commercializes the product.

The company’s US IPO is another way that the company management sees to generate income for the research projects. Initially, Argenx has stated that it would sell 3.6 million of its common stock as American Depositary Shares (ADSs). On Tuesday the firm amended its filing. Instead, Argenx intends to sell 5 million ADSs at $16.62 as opposed to the previous IPO price of $18.18. The new target price is a dollar conversion of the amount Argenx shares are currently trading at on the EBR stock market. With the amended filing Argenx can raise 27% more than it would have in the previous deal.  The new deal size is $83 million with Argenx guaranteed a market cap of $436 million at the IPO price.

Investors may look at the new deal size as a sound investment opportunity. After all, Argenx has not only increased its operating income from $2.8 million to $7.2 million but also tripled its revenue in the past two years.