Results of Operation
Comparison of Years Ended December 31, 2023 and 2022
|
|
Year Ended December 31, |
|
|
||
|---|---|---|---|---|---|---|
(in thousands of $) |
|
2023 |
|
2022 |
|
% Change |
Product net sales |
|
1,190,783 |
|
400,720 |
|
197% |
Collaboration revenue |
|
35,533 |
|
10,026 |
|
254% |
Other operating income |
|
42,278 |
|
34,520 |
|
22% |
Total operating income |
|
1,268,594 |
|
445,267 |
|
185% |
Cost of sales |
|
(117,835) |
|
(29,431) |
|
300% |
Research and development expenses |
|
(859,492) |
|
(663,366) |
|
30% |
Selling, general and administrative expenses |
|
(711,905) |
|
(472,132) |
|
51% |
Loss from investment in joint venture |
|
(4,411) |
|
(677) |
|
552% |
Total operating expenses |
|
(1,693,643) |
|
(1,165,607) |
|
45% |
Operating loss |
|
(425,049) |
|
(720,340) |
|
(41)% |
Financial income |
|
107,386 |
|
27,665 |
|
288% |
Financial expense |
|
(906) |
|
(3,906) |
|
(77)% |
Exchange gains/(loss) |
|
14,073 |
|
(32,732) |
|
(143)% |
Loss for the year before taxes |
|
(304,496) |
|
(729,314) |
|
(58)% |
Income tax benefit |
|
9,443 |
|
19,720 |
|
(52)% |
Loss for the year |
|
(295,053) |
|
(709,593) |
|
(58)% |
Weighted average number of shares outstanding |
|
57,169,253 |
|
54,381,371 |
|
|
Basic and diluted (loss) per share (in $) |
|
(5.16) |
|
(13.05) |
|
|
Product net sales
|
|
Year Ended December 31, |
||
|---|---|---|---|---|
(in thousands of $) |
|
2023 |
|
2022 |
United States |
|
1,046,592 |
|
377,659 |
Japan |
|
56,432 |
|
15,764 |
EMEA |
|
72,852 |
|
7,297 |
China |
|
14,907 |
|
– |
Total product net sales |
|
1,190,783 |
|
400,720 |
For the twelve months ended December 31, 2023, the product net sales were mainly related to sales of VYVGART in the U.S., Japan, EU and China and VYVGART SC in the U.S. and Europe.
|
|
Year Ended December 31, |
||||
|---|---|---|---|---|---|---|
(in thousands of $) |
|
2023 |
|
2022 |
|
2021 |
Product gross sales |
|
1,342,148 |
|
446,923 |
|
– |
Gross to net adjustment |
|
(151,365) |
|
(46,203) |
|
– |
Product net sales |
|
1,190,783 |
|
400,720 |
|
– |
Collaboration Revenue
|
|
Year Ended December 31, |
|
|
||
|---|---|---|---|---|---|---|
(in thousands of $) |
|
2023 |
|
2022 |
|
% Change |
AbbVie |
|
30,000 |
|
– |
|
N/A% |
Other |
|
– |
|
5,365 |
|
(100)% |
Milestone payments |
|
30,000 |
|
5,365 |
|
459% |
Other |
|
– |
|
424 |
|
(100)% |
Research and development service fees |
|
– |
|
424 |
|
(100)% |
Zai Lab |
|
5,533 |
|
4,238 |
|
31% |
Other collaboration revenues |
|
5,533 |
|
4,238 |
|
31% |
Total collaboration revenue |
|
35,533 |
|
10,026 |
|
254% |
Our collaboration revenue increased by $26 million to $36 million for the year ended December 31, 2023, compared to $10 million for the year ended December 31, 2022. The collaboration revenue recognized in the year ended December 31, 2023 was mainly the result of the recognition of a $30 million development milestone related to the AbbVie collaboration agreement. The revenue recognized during the year ended December 31, 2022, from milestone payments primarily relates to €5 million triggered by the option exercised by LEO Pharma to enter into the LEO Pharma Collaboration Agreement for ARGX-112. The increase in revenue recognition from “Other collaboration revenues” of $1 million was primarily driven by the royalties on net sales of VYVGART in Greater China through Zai Lab.
Other Operating Income
|
|
Year Ended December 31, |
|
|
||
|---|---|---|---|---|---|---|
(in thousands of $) |
|
2023 |
|
2022 |
|
% Change |
Grants |
|
2,538 |
|
2,186 |
|
16% |
Research and development incentives |
|
27,815 |
|
19,502 |
|
43% |
Payroll tax rebates |
|
11,925 |
|
8,576 |
|
39% |
Change in fair value on non-current financial assets |
|
– |
|
4,256 |
|
(100)% |
Total |
|
42,278 |
|
34,520 |
|
22% |
Other operating income increased by $8 million to $42 million for the year ended December 31, 2023, compared to $35 million for the year ended December 31, 2022. The $8 million increase was primarily driven by:
- the increase in research and development incentives due to a Belgian research and development tax incentive scheme, as a result of the overall increased research and development costs incurred.
- the increase in payroll tax rebates for the year ended December 31, 2023, as a result of higher research and development personnel expenses eligible for rebates for the year ended December 31, 2023; and
- a decrease of $4 million due to the fact that there was no change in fair value on our profit share in AgomAb for the year ended December 31, 2023;
For more information regarding governmental policies that could affect our operations, see “Business Overview” and “Healthcare Law and Regulation.”
Research and Development Expenses
|
|
Year Ended December 31, |
|
|
||
|---|---|---|---|---|---|---|
(in thousands of $) |
|
2023 |
|
2022 |
|
% Change |
Personnel expense |
|
226,344 |
|
162,010 |
|
40% |
External research and development expenses |
|
483,192 |
|
366,955 |
|
32% |
Materials and consumables |
|
4,057 |
|
2,396 |
|
69% |
Depreciation and amortization |
|
105,546 |
|
102,132 |
|
3% |
IT expenses |
|
19,935 |
|
12,678 |
|
57% |
Other expenses |
|
20,418 |
|
17,194 |
|
19% |
Total |
|
859,492 |
|
663,366 |
|
30% |
Our research and development expenses totaled $859 million and $663 million for the years ended December 31, 2023 and 2022, respectively. The increase of $196 million in fiscal year 2023 as compared to fiscal 2022 is primarily driven by Personnel expense and External research and development expenses.
Personnel expense primarily relates to internal and external personnel. The expense also includes share-based compensation expenses related to the grant of stock options and RSUs to our research and development employees. We employed on average 607 full-time equivalents in our research and development functions in the year ended December 31, 2023, compared to 475 in the year ended December 31, 2022.
Our external research and development expenses for the year ended December 31, 2023 totaled to $483 million, compared to $367 million for the year ended December 31, 2022. The expense reflects clinical trial costs and manufacturing expenses related to the development of our product candidate portfolio. The table below provides additional detail on our external research and development expenses by program:
|
|
Year Ended December 31, |
|
|
||||||
|---|---|---|---|---|---|---|---|---|---|---|
(in thousands of $) |
|
2023 |
|
2022 |
|
% Change |
||||
efgartigimod |
|
361,676 |
|
280,572 |
|
29% |
||||
cusatuzumab |
|
14,298 |
|
13,554 |
|
5% |
||||
empasiprubart |
|
47,636 |
|
32,384 |
|
47% |
||||
Other programs 1) |
|
59,582 |
|
40,445 |
|
47% |
||||
Total |
|
483,192 |
|
366,955 |
|
32% |
||||
|
||||||||||
External research and development expenses for our lead product candidate efgartigimod totaled $362 million for the year ended December 31, 2023, compared to $281 million for the year ended December 31, 2022. This increase corresponds primarily to manufacturing and clinical development activities in relation to:
- the execution of two Phase 3 clinical trials in MG Ph3b and Pediatric
- the execution of two Phase 3 clinical trials in CIDP;
- the execution of two Phase 3 clinical trial in PV and PF;
- the execution of Phase 2 and 3 clinical trials in BP, Myositis, LN, MN, AMR, POTS post-COVID-19, SjD, TED and AAV;
- the execution of multiple Phase 2 clinical trials in empasiprubart in MMN, DGF and DM
- the execution of one HV clinical trial in ARGX-119
- the execution of pre-clinical activities.
External research and development expenses for empasiprubart totaled $48 million for the year ended December 31, 2023 compared to $32 million for the year ended December 31, 2022. This increase of $15 million was due to the ramp up of Ph2 clinical trials in MMN, DGF and DM and further investments in Discovery activities.
External research and development expenses on other programs increased by $19 million to $60 million for the year ended December 31, 2023, compared to $40 million for the year ended December 31, 2022. Of the total external research and development expense, $27 million relates to general allocation of expenses.
Selling, general and administrative Expenses
|
|
Year Ended December 31, |
|
|
||
|---|---|---|---|---|---|---|
(in thousands of $) |
|
2023 |
|
2022 |
|
% Change |
Personnel expenses |
|
303,033 |
|
234,740 |
|
29% |
Marketing services |
|
202,146 |
|
115,950 |
|
74% |
Professional fees |
|
108,820 |
|
62,620 |
|
74% |
Supervisory board |
|
8,362 |
|
6,912 |
|
21% |
Depreciation and amortization |
|
2,366 |
|
2,211 |
|
7% |
IT expenses |
|
20,408 |
|
17,431 |
|
17% |
Other expenses |
|
66,770 |
|
32,268 |
|
107% |
Total Selling, general and administrative expenses |
|
711,905 |
|
472,132 |
|
51% |
Our Selling, general and administrative expenses totaled $712 million and $472 million for the years ended December 31, 2023 and 2022, respectively. The increase in our Selling, general and administrative expenses for the year ended December 31, 2023 was principally resulting from:
- increased professional and marketing fees, including promotional and marketing costs primarily due to the commercial launch of VYVGART and VYVGART SC;
- increased costs of the salary and wages and benefits to our Selling, general and administrative employees due to planned increase in the headcount;
- increased costs associated with additional employees recruited to strengthen our Selling, general and administrative activities, for the commercial launch of VYVGART and VYVGART SC; and
- continued investment in our IT infrastructure;
We employed on average 681 full-time equivalents in our Selling, general and administrative functions in the year ended December 31, 2023, compared to 442 in the year ended December 31, 2022.
Financial income and (expense)
For the year ended December 31, 2023, financial income amounted to $107 million compared to $28 million for the year ended December 31, 2022. The increase of $80 million in 2023 related primarily to higher interests.
For the year ended December 31, 2023, financial expense amounted to $1 million compared to $4 million for the year ended December 31, 2022.
Exchange Gains (Losses)
Exchange gains totaled $14 million for the year ended December 31, 2023, compared to exchange losses of $33 million for the year ended December 31, 2022. The decrease was mainly attributable to unrealized exchange rate gains on the cash, cash equivalents and current financial assets position in euro during the year ended December 31, 2023 as compared to unrealized exchange rate losses on the cash, cash equivalents and current financial assets position during the year ended December 31, 2022.