Argenx SE Spreads Its Wings Beyond Llamas

Seriously, llamas play a key role in the drug discovery process at Argenx.

Argenx uses llamas in drug discovery by immunizing them with a target protein to elicit a diverse range of antibodies, then isolating the genetic material from the llamas’ immune cells. These llama-derived antibody fragments, which are similar to human antibodies, are used to create a large library of potential drug candidates. The company then uses this library to develop and engineer therapeutic antibodies for autoimmune diseases and cancer, thanks to their unique characteristics like diversity and a high degree of human similarity. 

Antibody diversity: Llamas have a more diverse immune system, allowing them to generate antibodies that humans may not naturally produce, providing more options for drug candidates. 

Human-like antibodies: The antibodies produced by llamas are already similar to human antibodies, which reduces the amount of genetic modification needed to create a therapeutic and increases the chances of success. 

Targeting ability: Llamas’ antibodies are smaller than human antibodies, allowing them to better target and bind to disease-related proteins, including those on cell surfaces. 

Immunization: Llamas are immunized with a specific disease-related protein. This triggers their immune system to produce a wide variety of antibodies. 

Antibody isolation: Argenx isolates peripheral blood cells from the llamas and extracts the genetic material responsible for producing antibodies. 

Library generation: This genetic material is used to create a massive, diverse library of antibody genes, a process argenx calls the SIMPLE Antibody™ platform. 

Antibody engineering: The llama-derived antibody variable regions (V-regions) are combined with human antibody Fc regions. Argenx then uses its proprietary technologies to further engineer these antibodies for better therapeutic properties. 

Drug development: The resulting antibodies are tested for their ability to safely and effectively target disease-causing proteins in the human body. 

AI Overview

Increasingly, there is more to Argenx than llamas. It has just announced a significant joint venture with another pharma company.

Argenx has tapped Unnatural Products (UNP) and its AI platform to discover oral macrocyclic peptides targeting multiple historically “undruggable” targets. 

The deal, announced on Tuesday, is worth up to $1.5 billion across option payments, research, development, regulatory, and commercial milestones, as well as tiered royalties. UNP will receive undisclosed upfront and near-term payments, as well as R&D funding.

UNP will use its drug discovery platform — which combines AI-guided compound design, massively parallel synthesis and direct-to-biology screening — to discover macrocyclic peptides that bind targets selected by Argenx with antibody-like specificity. UNP will be responsible for R&D until the candidates reach IND-enabling studies, at which time Argenx can opt in to develop and commercialise products against these targets for multiple diseases.

Argenx will also invest in UNP’s series B, which the company is currently in the process of raising. The firm closed its last financing in 2023, collecting a $32-million series A led by Merck Global Health Innovation Fund. Shortly after, UNP signed a discovery deal with Merck & Co. valued at about $220 million in milestones. 

The biobucks of Tuesday’s deal with Argenx are worth more than six times that of the Merck tie-up, reflecting “the increased depth and maturity of our platform, as well as growing confidence from partners in its ability to deliver differentiated peptide therapeutics against complex targets,” UNP CEO Cameron Pye told FirstWord. “This trajectory — from the Merck deal to the expanded scope and value of our partnership with Argenx — highlights our evolution from a promising platform to a proven partner in drug discovery.”

I had a look at Unnatural Products (weird name) and its CEO and co-founder, Cameron Pye, and I can see why this deal would have appealed to Argenx.

When asked why he founded Unnatural Products (UNP), a developer of oral macrocyclic peptide therapeutics, Cameron Pye, PhD, attributes the decision at least in part to “being in the right place at the right time.” Pye and his co-founder Joshua Schwochert, PhD, met as doctoral students in the laboratory of Scott Lokey, PhD, at the University of California, Santa Cruz. Their research there exposed them to pre-competitive collaborations with pharmaceutical companies interested in macroyclic peptides.

Research in the Lokey lab has led to the launch of Circle Pharma, a company developing macrocycle therapies for cancer and other illnesses using a rational design approach. In founding UNP, Pye and Schwochert opted for a more data-driven approach to making synthetic molecules from non-canonical amino acids using nature as inspiration, Pye told GEN in an interview. From the beginning, “the goal was to build a platform technology” that was “target agnostic and therapeutic area agnostic” and to use it for internal projects as well as in collaborative partnerships.

The company’s most recent partnership is with immunology company argenx. UNP announced the multi-target deal earlier this week, noting that it will focus on discovering and developing synthetic oral macrocyclic peptide drugs that target “undruggable” disease targets. Under the terms of the agreement, the partners will utilize UNP’s platform for drug discovery, which combines AI-guided compound design, massively parallel synthesis, and direct-to-biology screening capabilities. UNP will conduct research and development until IND-enabling studies, and argenx will have the exclusive option to develop and commercialize products against these targets across multiple indications. 

Pye declined to disclose specifics about the targets that UNP and argenx will be pursuing, except to say that it will be in the immunology field. Commenting on the partnership with argenx, Pye noted that the company was “interested in other modalities” beyond antibodies. The partnership is really an “opportunity to put our heads together” and combine both companies’ expertise in biology and chemistry.  

UNP’s process starts by screening candidate molecules against a protein target using technologies and established approaches for testing macrocyclics like phage display or mRNA display. The hits are then fed into the company’s computational drug platform, where they are modified and optimized. There is no black box algorithm in the process, Pye told GEN. “What the platform’s about is being able to take smart shots on goal” in order to “find a successful hypothesis to weave your way through that chemical landscape to a development candidate.” 

As part of the deal with argenx, UNP will receive upfront, near-term payments and R&D funding. They are also eligible to receive up to approximately $1.5 billion in potential research, development, regulatory, and commercial milestones and option payments as well as tiered royalties on net sales. Additionally, argenx will make an equity investment in UNP. 

Genetic Engineering & Biotechnology News, 2 July 2025

Argenx CEO and co-founder, Tim Van Hauwermeiren, has said in the past that Argenx is all about data. It seems that UNP thinks the same way, and maybe this tells us much about the future of drug discovery and the likely growing role of AI.

Just in case it means anything, I looked up macrocylic peptides.

Macrocyclic peptides are molecules made of amino acids that form one or more rings, creating a more stable structure than linear peptides. This cyclic structure enhances their stability and pharmacological properties, making them promising therapeutic candidates that can target protein-protein interactions, an area difficult for traditional small-molecule drugs.  

AI Overview

There is no way of investing in the modern world without grappling with somewhat incomprehensible technology.

Argenx can do a deal like the one described above because the llamas have already helped it make two important drug discoveries, generating growing cash resources.

Argenx has two approved drugs: Vyvgart (efgartigimod alfa) and Vyvgart Hytrulo (efgartigimod alfa and hyaluronidase-qvfc). Both are approved for treating adult patients with generalized myasthenia gravis (gMG), and Vyvgart Hytrulo is also approved for chronic inflammatory demyelinating polyneuropathy (CIDP). Vyvgart Hytrulo has both an intravenous form and a self-injectable, subcutaneous form. 

AI Overview.

These two drugs alone have brought Argenx to 15,000 patients under treatment and annualised revenues of around $4bn a year. By 2030, Argenx has set out a path to 50,000 patients and with each patient generating revenues up to $459,000 a year, annual sales could be $20bn-plus.

What we can see is that Argenx is developing into a more complex and diversified pharmaceutical targeting multiple opportunities for drug discovery and growth. This may reflect the approach of CEO and co-founder, Tim Van Hauwermeiren, who has a consumer products background. He is all about finding drugs and bringing them to market in the most efficient way. This is also a mission because Argenx targets diseases of the immune system where there are few effective remedies available. When it makes progress, it helps many people.

Hauwermeiren has the right background, as we can see from the degrees he holds: a B.Sc. and M.Sc. in bioengineering from Ghent University and an Executive MBA from the Vlerick School of Management. 

Until recently, physicians could only dream of helping the people who are starting to benefit from Argenx’s drug discoveries. Plus it has an exciting pipeline of new potential drugs which could help many more people. Treatment costs are high, but that is the fuel powering the drug discovery process.

I am always somewhat wary of pharmaceutical companies, but I think Argenx is superbly managed, has a coherent strategy, and the value is underpinned by their roadmap to higher patient numbers and higher sales by 2030.

The shares initially reacted enthusiastically to the news of the UNP deal, but have since fallen back. This is understandable. The benefits of the deal are likely some way off, but it adds a powerful new element to Argenx’s strategy, and UNP itself could be an exciting company when it comes to float.

A tiny company that might be on a similar path to Argenx is Palvella.

Palvella Therapeutics is a clinical-stage biopharmaceutical company focused on developing and commercializing novel therapies to treat patients suffering from serious, rare genetic skin diseases for which there are no FDA-approved therapies. Palvella is developing a broad pipeline of product candidates based on its patented QTORIN™ platform. Palvella’s lead product candidate, QTORIN 3.9% rapamycin anhydrous gel (QTORIN™ rapamycin), is currently in clinical development for microcystic lymphatic malformations (microcystic LMs) and cutaneous venous malformations.

Palvella website

According to Palvella, this is virgin territory.

The big drug companies are not interested in these rare conditions, but Argenx is demonstrating that it is possible to make a difference and reward shareholders. Things seem to be happening at Palvella.

The roadmap that Palvella sets out is eerily reminiscent of that planned for Argenx with dramatic growth in patient numbers. The difference is that Argenx is talking about actual patients and high revenues per patient; Palvella is talking about potential patients, much lower likely per patient revenues and many hurdles yet to be overcome.

However, Argenx has demonstrated that much can be achieved from small beginnings. Furthermore, the absence of current treatment options makes it easier for Palvella to progress rapidly through the regulatory process.

I have no idea whether Qtorin will succeed, but I can see that doctors and patients are desperate for solutions, and if this is one, progress could be rapid. Unlike Argenx, Palvella does not have an approved product, but that could change soon, and success would have a dramatic impact on prospects for the business.

This is higher risk than some of my other selections, but I am adding Palvella to the Top 40 portfolio partly in the belief that Generative Artificial Intelligence will usher in an exciting new era for drug discovery, and the rare conditions being targeted by Argenx, Unnatural Products (unquoted), and Palvella represented almost virgin territory in terms of unmet but critically important patient needs.

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