This is Zack Fuss, an investor at Irenic Capital. Today, we're breaking down Argenx, an immunology company founded in 2008 by its three founding partners. Today, it's a $30 billion company set to produce over a billion dollars in sales. They're known for their skill in developing antibodies for complex disease targets and owe a large part of their medical breakthroughs to llamas, which have similar antibodies in their immune system to those found in humans.  To break down Argenx, I'm joined by Julia Angeles, an investment manager at Baillie Gifford. Throughout this conversation, we'll discuss how Argenx navigates the complex world of drug development, clinical trials, regulatory approvals, and the ultimate commercialization of autoimmune therapies. We'll also learn more about their transition from a venture capital backed business to its 2017 IPO, and today, a meaningful revenue generating business. We hope you enjoy this business breakdown. Note: This conversation was recorded on 19 July 2023. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.  ----- This episode is brought to you by Tegus, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Shownotes (00:03:49) - (First question) - Ways the immune system protects us and fails us (00:06:00) - Current patient treatments and evolving solutions to existing problems  (00:07:52) - The key difference between how the biotech community is addressing big diseases versus autoimmune disorders (00:09:55) - What sparked Julia’s interest in Argenx (00:14:01) - Explanation how we use animal antibodies to help research progression (00:15:25) - The foundations of the business (00:17:57) - The evolution of the business and its commercial success thus far (00:20:22) - Transitioning from lab antibodies to a commercial product ready for consumers (00:23:42) - The infrastructure needed to maintain and grow Argenx (00:26:43) - Indicators of commercial success (00:29:27) - The basic revenue model for this business type (00:30:49) - Go to market strategies for developed drugs  (00:34:39) - Pricing and patient protection of these newly developed drugs  (00:37:46) - Cures versus creating treatments with recurring revenue streams (00:39:38) - The importance of the current team composition  (00:41:44) - Julia’s perspective on what they are willing to invest to grow the company (00:43:49) - Normalized profitability for biotech companies such as this (00:45:59) - Potential risks to the current business model (00:49:22) - Lessons learned from studying Argenx

This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down Lululemon Athletica. The Canadian company, founded by Chip Wilson in 1998, has grown from a pop-up store in a yoga class to a $45 billion apparel business. Along the way, it pioneered the trend of athleisure and forever changed what women and men wear to work out in. To break down the business, I am joined by John Zolidis, president and founder of Quo Vadis Capital. We explore the origins of Lululemon’s direct to consumer growth strategy, how it has remained relevant in an industry known for fleeting success, and how its business model compares to apparel giants like Nike. Please enjoy this business breakdown of Lululemon.  For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.  ----- This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 driveable global models handbuilt by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:02:30) - (First question) - An overview of Lululemon (00:03:27) - Lululemon's success lies in branding, innovation, and community involvement (00:05:53) - Evaluating their growth story and investment potential (00:09:57) - Chip Wilson’s history and influence (00:16:53) - Management transitions, operational issues, and turnaround under new leadership (00:20:01) - Lululemon's success lies in its functional product and strong brand message (00:23:13) - Fending off competition through unique branding and customer engagement (00:26:31) - Lulu aims to grow men's business to complement women's dominance and reach (00:28:46) - China offers significant growth potential for Lululemon (00:32:35) - Focusing on vertical integration and limited wholesale channels (00:34:21) - Lulu's higher gross margins stem from product mix and DTC focus (00:37:08) - Increased capital expenditure is primarily allocated to store openings (00:40:18) - Mirror acquisition didn't meet expectations, unlikely to repeat such deals (00:42:30) - Significant risks for Lululemon's future (00:44:48) - Lessons learned from studying Lululemon