Apellis Pharmaceuticals Reports First Quarter 2024 Financial Results

• Generated $172.3 million in 1Q 2024 revenues, including $163.1 million in U.S. net product sales
  • $137.5 million for SYFOVRE® (pegcetacoplan injection)
  • $25.6 million for EMPAVELI® (pegcetacoplan)
• Anticipates CHMP opinion for pegcetacoplan in GA no later than July 2024
• On track to report topline Phase 3 data with systemic pegcetacoplan in C3G / IC-MPGN in mid-2024
• Cash and cash equivalents of $325.9 million as of March 31, 2024; projected revenues and cash expected to be sufficient to fund operations for foreseeable future
• Management to host conference call today at 8:30 a.m. ET

WALTHAM, Mass., May 07, 2024 (GLOBE NEWSWIRE) -- Apellis Pharmaceuticals, Inc. (Nasdaq: APLS), today announced its first quarter 2024 financial results and business highlights.

“We made excellent progress against our strategic priorities during the quarter, including bringing SYFOVRE to more patients in the U.S., advancing EMPAVELI within multiple high unmet need areas, and progressing our earlier-stage pipeline,” said Cedric Francois, M.D., Ph.D., co-founder and chief executive officer of Apellis.

Dr. Francois continued, “SYFOVRE performance continues to exceed expectations in the U.S., with 20% revenue growth in the first quarter, and we are working closely with the EU regulators towards our goal of bringing pegcetacoplan to the GA community in Europe. EMPAVELI continues to elevate the standard of care in PNH, and we are excited about the upcoming topline readout from our Phase 3 VALIANT trial with EMPAVELI for C3G and IC-MPGN. With two commercial products and an emerging pipeline, we are making tremendous progress on our vision to develop life-changing medicines for people living with some of the most challenging diseases.”

First Quarter 2024 Business Highlights and Upcoming Milestones

Ophthalmology Highlights

• SYFOVRE for the treatment of geographic atrophy (GA) secondary to age-related macular degeneration (AMD):
  • Generated $137.5 million in SYFOVRE U.S. net product revenue in the first quarter of 2024.
  • SYFOVRE is the #1 chosen treatment for GA, delivering approximately 77,000 SYFOVRE doses to physician practices in the first quarter of 2024 (72,000 commercial doses and 5,000 samples).
    • Approximately 250,000 SYFOVRE injections are estimated to have been administered through March 2024, including clinical trials.
  • Launched a branded direct-to-consumer (DTC) awareness campaign in April 2024. The branded campaign builds on the previous disease state awareness campaigns and is aimed at educating GA patients about SYFOVRE.
  • Announced that the European Medicines Agency (EMA) has reset the pegcetacoplan marketing authorization application (MAA) review to day 180, the last phase of the initial assessment.
    • The update follows the judgment by the Court of Justice of the European Union (CJEU) on March 14, 2024, which ruled on the organization of EMA’s expert groups. This decision by EMA is strictly procedural in response to the CJEU judgment and is not related to the pegcetacoplan data package.
    • Apellis now anticipates a CHMP opinion no later than July 2024.
  • Leading retina specialist Dr. Philip Ferrone joined Apellis in March 2024 as chief medical retina advisor.
    

Paroxysmal Nocturnal Hemoglobinuria (PNH) Highlights

• EMPAVELI for the treatment of PNH:
  • Generated $25.6 million in EMPAVELI U.S. net product revenue in the first quarter of 2024.
  • Continued high patient compliance rates of 97%.
    

R&D Highlights

• C3 glomerulopathy (C3G) and immune complex glomerulonephritis (IC-MPGN): Topline data from the Phase 3 VALIANT study of systemic pegcetacoplan is expected in mid-2024.
  • VALIANT is a randomized, placebo-controlled, double-blinded, multi-center study designed to evaluate the safety and efficacy of systemic pegcetacoplan in 124 patients aged 12 and up with either C3G or IC-MPGN, and either pre- or post-kidney transplant.
  • The primary endpoint is the log transformed ratio of urine protein-to-creatinine ratio (uPCR) at week 26 compared to baseline.
• Hematopoietic stem cell transplantation-associated thrombotic microangiopathy (HSCT-TMA): Sobi continues to enroll patients in its Phase 2 study evaluating the efficacy and safety of systemic pegcetacoplan in patients with HSCT-TMA.
• APL-3007 (small interfering RNA silencing C3): Continue to expect to report topline data from the Phase 1 dose escalation study in 2024.
  

First Quarter 2024 Financial Results

Total Revenue.

• Total revenue was $172.3 million for the first quarter of 2024, which consisted of $137.5 million of U.S. net product revenue of SYFOVRE, $25.6 million of U.S. net product revenue of EMPAVELI, and $9.3 million in licensing and other revenue associated with the Sobi collaboration.
  • Total revenue was $44.8 million for the first quarter of 2023, which consisted of, $18.4 million of U.S. net product revenue of SYFOVRE, $20.4 million in net product revenue of EMPAVELI and $6.0 million in revenue associated with the Sobi collaboration.

Cost of Sales.

• Cost of sales was $20.2 million for the first quarter of 2024, compared to $7.8 million for same period in 2023.
  • The increase in cost of sales was primarily driven by an increase due to higher volume from commercial sales and product provided under our patient assistance programs, an increase in royalty expense, and an increase in expenses incurred related to excess or obsolete inventory.

R&D Expenses.

• R&D expenses were $84.7 million for the first quarter of 2024, compared to $110.0 million for the same period in 2023.
  • The decrease in R&D expenses for the first quarter of 2024 was primarily attributable to a decrease in program specific external costs, a decrease in compensation and related personnel costs, and a decrease in non-program specific external costs, which were partially offset by a $15.0 million one-time expense in the first quarter related to the discontinuation of systemic pegcetacoplan for cold agglutinin disease (CAD).

Selling, General and Administrative (SG&A) Expenses.

• SG&A expenses were $129.5 million for the first quarter of 2024, compared to $102.1 million for the same period in 2023.
  • The increase in SG&A expenses for the first quarter of 2024 was primarily attributable to an increase in personnel related costs, an increase in professional and consulting fees and general commercial preparation activities, and higher office costs, which were partially offset by a decrease in travel expenses and a decrease in insurance expenses.

Net Loss. Apellis reported a net loss of $66.4 million for the first quarter 2024, compared to a net loss of $177.8 million for the same period in 2023.

Cash. As of March 31, 2024, Apellis had $325.9 million in cash and cash equivalents, compared to $351.2 million in cash and cash equivalents as of December 31, 2023.

• In February 2024, Apellis received $98.8 million in non-dilutive, cash proceeds related to the unwind of its capped call transactions in connection with the issuance of the Company’s 3.500% Senior Convertible Notes due 2026.
• Apellis anticipates its cash balance, combined with projected sales of EMPAVELI and SYFOVRE, will be sufficient to fund operations for the foreseeable future.

Conference Call and Webcast
Apellis will host a conference call and webcast to discuss its first quarter 2024 financial results and business highlights today, May 7, 2024, at 8:30 a.m. ET. To access the live call by phone, please pre-register for the call here. A live audio webcast of the event and accompanying slides may also be accessed through the “Events and Presentations” page of the “Investors and Media” section of the company’s website. A replay of the webcast will be available for 30 days following the event.

About SYFOVRE^® (pegcetacoplan injection)
SYFOVRE^® (pegcetacoplan injection) is the first-ever approved therapy for geographic atrophy (GA). By targeting C3, SYFOVRE is designed to provide comprehensive control of the complement cascade, part of the body’s immune system. SYFOVRE is approved in the United States for the treatment of GA secondary to age-related macular degeneration.

About EMPAVELI®/Aspaveli^® (pegcetacoplan)
EMPAVELI^®/Aspaveli^® (pegcetacoplan) is a targeted C3 therapy designed to regulate excessive activation of the complement cascade, part of the body’s immune system, which can lead to the onset and progression of many serious diseases. It is approved for the treatment of paroxysmal nocturnal hemoglobinuria (PNH) in the United States, European Union, and other countries globally. The therapy is also under investigation for several other rare diseases across hematology and nephrology.

U.S. Important Safety Information for SYFOVRE^®(pegcetacoplan injection)

CONTRAINDICATIONS

• SYFOVRE is contraindicated in patients with ocular or periocular infections, and in patients with active intraocular inflammation
  

WARNINGS AND PRECAUTIONS

• Endophthalmitis and Retinal Detachments
  • Intravitreal injections, including those with SYFOVRE, may be associated with endophthalmitis and retinal detachments. Proper aseptic injection technique must always be used when administering SYFOVRE to minimize the risk of endophthalmitis. Patients should be instructed to report any symptoms suggestive of endophthalmitis or retinal detachment without delay and should be managed appropriately.
• Retinal Vasculitis and/or Retinal Vascular Occlusion
  • Retinal vasculitis and/or retinal vascular occlusion, typically in the presence of intraocular inflammation, have been reported with the use of SYFOVRE. Cases may occur with the first dose of SYFOVRE and may result in severe vision loss. Discontinue treatment with SYFOVRE in patients who develop these events. Patients should be instructed to report any change in vision without delay.
• Neovascular AMD
  • In clinical trials, use of SYFOVRE was associated with increased rates of neovascular (wet) AMD or choroidal neovascularization (12% when administered monthly, 7% when administered every other month and 3% in the control group) by Month 24. Patients receiving SYFOVRE should be monitored for signs of neovascular AMD. In case anti-Vascular Endothelial Growth Factor (anti-VEGF) is required, it should be given separately from SYFOVRE administration.
• Intraocular Inflammation
  • In clinical trials, use of SYFOVRE was associated with episodes of intraocular inflammation including: vitritis, vitreal cells, iridocyclitis, uveitis, anterior chamber cells, iritis, and anterior chamber flare. After inflammation resolves, patients may resume treatment with SYFOVRE.
• Increased Intraocular Pressure
  • Acute increase in IOP may occur within minutes of any intravitreal injection, including with SYFOVRE. Perfusion of the optic nerve head should be monitored following the injection and managed as needed.

ADVERSE REACTIONS

• Most common adverse reactions (incidence ≥5%) are ocular discomfort, neovascular age-related macular degeneration, vitreous floaters, conjunctival hemorrhage.
  

Please see accompanying full Prescribing Information for more information.

U.S. Important Safety Information for EMPAVELI^® (pegcetacoplan)

BOXED WARNING: SERIOUS INFECTIONS CAUSED BY ENCAPSULATED BACTERIA

EMPAVELI, a complement inhibitor, increases the risk of serious infections, especially those caused by encapsulated bacteria, such as Streptococcus pneumoniae, Neisseria meningitidis, and Haemophilus influenzae type B. Life-threatening and fatal infections with encapsulated bacteria have occurred in patients treated with complement inhibitors. These infections may become rapidly life-threatening or fatal if not recognized and treated early.

• Complete or update vaccination for encapsulated bacteria at least 2 weeks prior to the first dose of EMPAVELI, unless the risks of delaying therapy with EMPAVELI outweigh the risks of developing a serious infection. Comply with the most current Advisory Committee on Immunization Practices (ACIP) recommendations for vaccinations against encapsulated bacteria in patients receiving a complement inhibitor.
• Patients receiving EMPAVELI are at increased risk for invasive disease caused by encapsulated bacteria, even if they develop antibodies following vaccination. Monitor patients for early signs and symptoms of serious infections and evaluate immediately if infection is suspected.

Because of the risk of serious infections caused by encapsulated bacteria, EMPAVELI is available only through a restricted program under a Risk Evaluation and Mitigation Strategy (REMS) called the EMPAVELI REMS.

CONTRAINDICATIONS

• Hypersensitivity to pegcetacoplan or to any of the excipients
• For initiation in patients with unresolved serious infection caused by encapsulated bacteria including Streptococcus pneumoniae, Neisseria meningitidis, and Haemophilus influenzae type B

WARNINGS AND PRECAUTIONS

Serious Infections Caused by Encapsulated Bacteria

EMPAVELI, a complement inhibitor, increases a patient’s susceptibility to serious, life-threatening, or fatal infections caused by encapsulated bacteria including Streptococcus pneumoniae, Neisseria meningitidis (caused by any serogroup, including non-groupable strains), and Haemophilus influenzae type B. Life-threatening and fatal infections with encapsulated bacteria have occurred in both vaccinated and unvaccinated patients treated with complement inhibitors. The initiation of EMPAVELI treatment is contraindicated in patients with unresolved serious infection caused by encapsulated bacteria.

Complete or update vaccination against encapsulated bacteria at least 2 weeks prior to administration of the first dose of EMPAVELI, according to the most current ACIP recommendations for patients receiving a complement inhibitor. Revaccinate patients in accordance with ACIP recommendations considering the duration of therapy with EMPAVELI. Note that, ACIP recommends an administration schedule in patients receiving complement inhibitors that differs from the administration schedule in the vaccine prescribing information. If urgent EMPAVELI therapy is indicated in a patient who is not up to date with vaccines against encapsulated bacteria according to ACIP recommendations, provide the patient with antibacterial drug prophylaxis and administer these vaccines as soon as possible. The benefits and risks of treatment with EMPAVELI, as well as the benefits and risks of antibacterial drug prophylaxis in unvaccinated or vaccinated patients, must be considered against the known risks for serious infections caused by encapsulated bacteria.

Vaccination does not eliminate the risk of serious encapsulated bacterial infections, despite development of antibodies following vaccination. Closely monitor patients for early signs and symptoms of serious infection and evaluate patients immediately if an infection is suspected. Inform patients of these signs and symptoms and instruct patients to seek immediate medical care if these signs and symptoms occur. Promptly treat known infections. Serious infection may become rapidly life-threatening or fatal if not recognized and treated early. Consider interruption of EMPAVELI in patients who are undergoing treatment for serious infections.

EMPAVELI is available only through a restricted program under a REMS.

EMPAVELI REMS

EMPAVELI is available only through a restricted program under a REMS called EMPAVELI REMS, because of the risk of serious infections caused by encapsulated bacteria. Notable requirements of the EMPAVELI REMS include the following:

Under the EMPAVELI REMS, prescribers must enroll in the program. Prescribers must counsel patients about the risks, signs, and symptoms of serious infections caused by encapsulated bacteria, provide patients with the REMS educational materials, ensure patients are vaccinated against encapsulated bacteria at least 2 weeks prior to the first dose of EMPAVELI, prescribe antibacterial drug prophylaxis if patients’ vaccine status is not up to date and treatment must be started urgently, and provide instructions to always carry the Patient Safety Card both during treatment, as well as for 2 months following last dose of EMPAVELI. Pharmacies that dispense EMPAVELI must be certified in the EMPAVELI REMS and must verify prescribers are certified.

Further information is available at www.empavelirems.com or 1-888-343-7073.

Infusion-Related Reactions

Systemic hypersensitivity reactions (e.g., facial swelling, rash, urticaria) have occurred in patients treated with EMPAVELI. One patient (less than 1% in clinical studies) experienced a serious allergic reaction which resolved after treatment with antihistamines. If a severe hypersensitivity reaction (including anaphylaxis) occurs, discontinue EMPAVELI infusion immediately, institute appropriate treatment, per standard of care, and monitor until signs and symptoms are resolved.

Monitoring PNH Manifestations after Discontinuation of EMPAVELI

After discontinuing treatment with EMPAVELI, closely monitor for signs and symptoms of hemolysis, identified by elevated LDH levels along with sudden decrease in PNH clone size or hemoglobin, or reappearance of symptoms such as fatigue, hemoglobinuria, abdominal pain, dyspnea, major adverse vascular events (including thrombosis), dysphagia, or erectile dysfunction. Monitor any patient who discontinues EMPAVELI for at least 8 weeks to detect hemolysis and other reactions. If hemolysis, including elevated LDH, occurs after discontinuation of EMPAVELI, consider restarting treatment with EMPAVELI.

Interference with Laboratory Tests

There may be interference between silica reagents in coagulation panels and EMPAVELI that results in artificially prolonged activated partial thromboplastin time (aPTT); therefore, avoid the use of silica reagents in coagulation panels.

ADVERSE REACTIONS

Most common adverse reactions in patients with PNH (incidence ≥10%) were injection site reactions, infections, diarrhea, abdominal pain, respiratory tract infection, pain in extremity, hypokalemia, fatigue, viral infection, cough, arthralgia, dizziness, headache, and rash.

USE IN SPECIFIC POPULATIONS

Females of Reproductive Potential

EMPAVELI may cause embryo-fetal harm when administered to pregnant women. Pregnancy testing is recommended for females of reproductive potential prior to treatment with EMPAVELI. Advise female patients of reproductive potential to use effective contraception during treatment with EMPAVELI and for 40 days after the last dose.

Please see full Prescribing Information, including Boxed WARNING regarding serious infections caused by encapsulated bacteria, and Medication Guide.

About Apellis

Apellis Pharmaceuticals, Inc. is a global biopharmaceutical company that combines courageous science and compassion to develop life-changing therapies for some of the most challenging diseases patients face. We ushered in the first new class of complement medicine in 15 years and now have two approved medicines targeting C3. These include the first-ever therapy for geographic atrophy, a leading cause of blindness around the world. We believe we have only begun to unlock the potential of targeting C3 across serious retinal, rare, and neurological diseases. For more information, please visit http://apellis.com or follow us on Twitter and LinkedIn.

Apellis Forward-Looking Statement
Statements in this press release about future expectations, plans and prospects, as well as any other statements regarding matters that are not historical facts, may constitute “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding the expected timing of clinical data, the review of the marketing authorization application of SYFOVRE by the EMA. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including whether the benefit/risk profile of SYFOVRE following the events of retinal vasculitis will impact the Company’s commercialization efforts; whether SYFOVRE will receive approval from foreign regulatory agencies for GA when expected or at all, including the impact of the reported events of retinal vasculitis on the likelihood and timing of such approvals; whether the Company’s clinical trials will be completed when anticipated; whether results obtained in clinical trials will be indicative of results that will be generated in future clinical trials; whether pegcetacoplan will successfully advance through the clinical trial process on a timely basis, or at all; whether the results of the Company’s clinical trials will warrant regulatory submissions and whether systemic pegcetacoplan will receive approval from the FDA or equivalent foreign regulatory agencies for C3G and IC-MPGN or any other indication when expected or at all; the period for which the Company believes that its cash resources will be sufficient to fund its operations; and other factors discussed in the “Risk Factors” section of Apellis’ Annual Report on Form 10-K with the Securities and Exchange Commission on February 27, 2024 and the risks described in other filings that Apellis may make with the Securities and Exchange Commission. Any forward-looking statements contained in this press release speak only as of the date hereof, and Apellis specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

Media Contact:
Lissa Pavluk
media@apellis.com
617.977.6764

Investor Contact:
Meredith Kaya
meredith.kaya@apellis.com
617.599.8178

APELLIS PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share amounts)
	March 31,				December 31,
		2024				2023
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	325,923			$	351,185
Accounts receivable		267,837				206,442
Inventory		161,283				146,362
Prepaid assets		43,163				38,820
Restricted cash		1,103				1,114
Other current assets		12,119				22,408
Total current assets		811,428				766,331
Non-current assets:
Right-of-use assets		14,994				16,745
Property and equipment, net		4,195				4,345
Other assets		1,313				1,309
Total assets	$	831,930			$	788,730
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	26,788				37,516
Accrued expenses		101,399				127,806
Current portion of development liability		77,287				75,830
Current portion of lease liabilities		6,257				6,441
Deferred Revenue		3,560				—
Total current liabilities		215,291				247,593
Long-term liabilities:
Long-term development liability		244,426				239,817
Convertible senior notes		93,109				93,033
Lease liabilities		9,770				11,454
Other liabilities		2,658				2,312
Total liabilities		565,254				594,209
Stockholders' equity:
Preferred stock, $0.0001 par value; 10,000 shares authorized and zero shares issued and outstanding at March 31, 2024 and December 31, 2023		—				—
Common stock, $0.0001 par value; 200,000 shares authorized at March 31, 2024 and December 31, 2023; 121,267 shares issued and outstanding at March 31, 2024, and 119,556 shares issued and outstanding at December 31, 2023		12				12
Additional paid-in capital		3,174,100				3,035,539
Accumulated other comprehensive loss		(3,525	)			(3,542	)
Accumulated deficit		(2,903,911	)			(2,837,488	)
Total stockholders' equity		266,676				194,521
Total liabilities and stockholders' equity	$	831,930			$	788,730

APELLIS PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Amounts in thousands, except per share amounts)
	For the Three Months Ended March 31,
		2024				2023
	(Unaudited)
Revenue:
Product revenue, net	$	163,075			$	38,800
Licensing and other revenue		9,250				6,046
Total revenue:		172,325				44,846
Operating expenses:
Cost of sales		20,209				7,809
Research and development		84,701				110,027
Selling, general and administrative		129,505				102,093
Operating expenses:		234,415				219,929
Net operating loss		(62,090	)			(175,083	)
Interest income		3,303				5,393
Interest expense		(6,967	)			(7,529	)
Other (expense) /income, net		(499	)			(277	)
Net loss before taxes		(66,253	)			(177,496	)
Income tax expense		170				282
Net loss	$	(66,423	)		$	(177,778	)
Other comprehensive gain/(loss):
Foreign currency translation		17				100
Total other comprehensive income		17				100
Comprehensive loss, net of tax	$	(66,406	)		$	(177,678	)
Net loss per common share, basic and diluted	$	(0.54	)		$	(1.56	)
Weighted-average number of common shares used in net loss per common share, basic and diluted		122,957				113,872