Apellis Pharmaceuticals Reports First Quarter 2021 Financial Results

Rhea-AI Summary

Apellis Pharmaceuticals (APLS) announced its Q1 2021 financial results and key business developments. The FDA's review of pegcetacoplan for paroxysmal nocturnal hemoglobinuria (PNH) is ongoing, with a target action date of May 14, 2021. The company expects top-line results from the Phase 3 PRINCE study and GA studies in Q2 and Q3 2021, respectively. Cash reserves stand at $723.7 million, ensuring operational runway into late 2022. However, the company reported a Q1 net loss of $183.7 million, up from $168.8 million in 2020, driven by rising R&D and administrative expenses.

Positive

• FDA's ongoing review of pegcetacoplan with a target action date of May 14, 2021.
• Cash reserves of $723.7 million support operations into late 2022.
• Upcoming Phase 3 study results expected in 2021 for PNH and GA.

Negative

• Net loss increased to $183.7 million in Q1 2021 from $168.8 million in Q1 2020.
• R&D expenses rose to $84.0 million, impacting overall financials.

• Marketing application for pegcetacoplan for paroxysmal nocturnal hemoglobinuria (PNH) is under review by the U.S. Food and Drug Administration (FDA) with a PDUFA target action date of May 14, 2021
• Top-line results from the Phase 3 PRINCE study in treatment-naïve PNH patients expected in the second quarter of 2021
• Top-line results from Phase 3 geographic atrophy (GA) studies expected in the third quarter of 2021
• Three new product candidates advancing into clinical development by the end of 2022
• Cash and investments of $723.7 million as of March 31, 2021 support cash runway into the second half of 2022
• Conference call scheduled today at 4:30 p.m. ET

WALTHAM, Mass., April 28, 2021 (GLOBE NEWSWIRE) -- Apellis Pharmaceuticals, Inc. (Nasdaq: APLS), a global biopharmaceutical company and leader in targeted C3 therapies, today announced its first quarter 2021 financial results and business highlights.

“With a potential U.S. approval for pegcetacoplan just a couple of weeks away, we are at the beginning of a transformational year for Apellis. Our commercial team is prepared to successfully execute our first product launch and meet the needs of PNH patients,” said Cedric Francois, M.D., Ph.D., co-founder and chief executive officer of Apellis. “At the same time, we are focused on advancing registrational programs of pegcetacoplan across several debilitating rare diseases and delivering on our goal to become number one in the retina. Geographic atrophy is the most significant remaining unmet need in the retina, and we are excited to see top-line results from our Phase 3 studies of pegcetacoplan in GA in the third quarter of this year.

“For more than a decade, our team has built the foundation for Apellis’ leadership in complement, and we look forward to seeing the results of those efforts come together this year for patients living with serious, complement-driven diseases,” Dr. Francois continued.

First Quarter 2021 Business Highlights and Upcoming Milestones:

Systemic Pegcetacoplan in Rare Disease

• In March 2021, Apellis and Sobi announced that the New England Journal of Medicine published results from the Phase 3 PEGASUS study. The data at 16 weeks showed that pegcetacoplan, an investigational targeted C3 therapy, demonstrated statistically superior increases in mean hemoglobin levels compared with the C5 inhibitor Soliris® (eculizumab) and provided substantial improvements in other key markers of disease in adults with PNH who had persistent anemia following treatment with Soliris.
• Marketing applications for pegcetacoplan for the treatment of PNH are under review by the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA). The New Drug Application was granted Priority Review by the FDA with a Prescription Drug User Fee Act (PDUFA) target action date of May 14, 2021. The Marketing Authorization Application has the potential for a European Commission decision in the second half of 2021.
• In the second quarter of 2021, Apellis and Sobi expect to report top-line results from the Phase 3 PRINCE study in PNH patients who are treatment naïve.
• In the second half of 2021, Apellis expects to initiate a Phase 3 study in immune complex membranoproliferative glomerulonephritis (IC-MPGN) and C3 glomerulopathy (C3G), and Sobi plans to initiate a Phase 3 study in cold agglutinin disease (CAD) and a potentially registrational Phase 2 study in hematopoietic stem cell transplantation-associated thrombotic microangiopathy (HSCT-TMA).

Intravitreal Pegcetacoplan in Ophthalmology

• In April 2021, Apellis announced 24-month data from the Phase 1b study of intravitreal pegcetacoplan in patients with advanced geographic atrophy (GA) and low vision. Data from a post hoc analysis demonstrated a 46% decrease in the growth rate of GA lesions in the treated eye compared to the untreated eye in eight patients with bilateral GA (disease in both eyes) at 24 months (p=0.007).
• In March 2021, Apellis announced that two leading journals, Ophthalmology and the American Journal of Ophthalmology, published post hoc analyses from the Phase 2 FILLY study of intravitreal pegcetacoplan for GA secondary to age-related macular degeneration. The published data underscore the potential of pegcetacoplan for GA.
• The company expects to announce top-line results from the Phase 3 DERBY and OAKS studies in the third quarter of 2021.
  

APL-9 in COVID-19

• In March 2021, Apellis announced that the company will not pursue additional development of APL-9, an investigational targeted C3 therapy designed for acute interventions, for the treatment of severe COVID-19. The decision followed an interim review of mortality data from the Phase 1/2 study by an independent data monitoring committee (DMC), which found no meaningful reduction in the overall mortality rate in patients treated with APL-9 in combination with standard of care therapy compared to standard of care alone. No safety signals were observed by the DMC.
  

Pipeline Expansion

• Apellis plans to advance three new product candidates into clinical development by the end of 2022.
  

First Quarter 2021 Financial Results:

As of March 31, 2021, Apellis had $723.7 million in cash, cash equivalents, and short-term marketable securities, compared to $646.7 million in cash, cash equivalents, and short-term marketable securities as of March 31, 2020. This increase primarily reflects the addition of cash from the company’s convertible offering for gross proceeds of $328.9 million in May 2020, the receipt of $250.0 million in the upfront proceeds for the Sobi transaction in October 2020, and an additional $25.0 million receipt from Sobi in January 2021 less cash used in operations.

Apellis reported a net loss of $183.7 million for the first quarter of 2021, compared to a net loss of $168.8 million for the same period in 2020.

Research and development expenses were $84.0 million in the first quarter of 2021, compared to $69.3 million for the same period in 2020. The increase in R&D expense for first quarter 2021 was primarily attributable to an increase in clinical trial costs associated with the ongoing Phase 3 trials and the preparation and commencement of our clinical trials in other indications, personnel-related costs primarily due to the hiring of additional personnel, and increased quality and medical affairs expenses. We expect our research and development expenses to continue to increase as the number of patients in our trials increases and the number of ongoing trials increases.

General and administrative expenses were $40.6 million in the first quarter of 2021, compared to $29.5 million for the same period in 2020. The increase in general and administrative expenses for the first quarter 2021 was primarily attributable to an increase in employee-related costs, professional and consulting fees, general commercial preparation activities, director stock compensation expense, and insurance.

Conference Call and Webcast
Apellis will host a conference call and webcast to discuss its first quarter 2021 financial results and business highlights today, April 28, 2021, at 4:30 p.m. ET. To access the conference call, please dial (866) 774-0323 (local) or (602) 563-8683 (international) at least 10 minutes prior to the start time and refer to conference ID 7883183. 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 at http://investors.apellis.com/events-and-presentations. A replay of the webcast will be available for 30 days following the event.

About Pegcetacoplan
Pegcetacoplan is an investigational, 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. Pegcetacoplan is a synthetic cyclic peptide conjugated to a polyethylene glycol polymer that binds specifically to C3 and C3b. Pegcetacoplan is being evaluated in several clinical studies across hematology, ophthalmology, nephrology, and neurology. Marketing applications for pegcetacoplan for paroxysmal nocturnal hemoglobinuria (PNH) are under review by the U.S. Food and Drug Administration (FDA), which has granted the application Priority Review designation, and the European Medicines Agency (EMA). Pegcetacoplan was granted Fast Track designation by the U.S. Food and Drug Administration (FDA) for the treatment of geographic atrophy and received orphan drug designation for the treatment of C3 glomerulopathy by the FDA and EMA. For additional information regarding pegcetacoplan clinical trials, visit https://apellis.com/our-science/clinical-trials.

About APL-9
APL-9 is an investigational, targeted C3 therapy designed to control the complement cascade centrally and may have the potential to treat a range of diseases caused by excessive activation of complement. APL-9 leverages the same mechanism of action as Apellis’ lead compound, pegcetacoplan, but has a lower molecular weight and shorter half-life. APL-9 is designed to be intravenously administered for acute use.

About Apellis
Apellis Pharmaceuticals, Inc. is a global biopharmaceutical company that is committed to leveraging courageous science, creativity, and compassion to deliver life-changing therapies. Leaders in targeted C3 therapies, we aim to develop transformative therapies for a broad range of debilitating diseases that are driven by excessive activation of the complement cascade, including those within hematology, ophthalmology, nephrology, and neurology. For more information, please visit www.apellis.com.

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 in respect of the expected closing of the exchanges. 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 conditions for the closing of the exchanges will be satisfied and other factors discussed in the “Risk Factors” section of Apellis’ Quarterly Report on Form 10-Q with the Securities and Exchange Commission on April 28, 2021 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.

Investor Contact:
Argot Partners
apellis@argotpartners.com
+1 212.600.1902

Media Contact:
Tracy Vineis
media@apellis.com
617.420.4839

APELLIS PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share amounts)
		March 31,				December 31,
		2021				2020
Assets		(Unaudited)
Current assets:
Cash and cash equivalents		$	265,435			$	565,779
Marketable securities			458,237				311,869
Prepaid assets			17,203				11,400
Restricted cash			1,552				1,266
Other current assets			31,198				26,878
Total current assets			773,625				917,192
Non-current assets:
Right-of-use assets			22,518				17,719
Property and equipment, net			7,077				6,803
Other assets			6,909				18,855
Total assets		$	810,129			$	960,569
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	4,158			$	8,477
Accrued expenses			69,398				111,935
Current portion of development derivative liability			6,212				4,230
Current portion of right-of-use liabilities			3,902				3,685
Total current liabilities			83,670				128,327
Long-term liabilities:
Convertible senior notes			386,152				358,830
Development derivative liability			268,740				253,638
Right-of-use liabilities			19,909				15,217
Total liabilities			758,471				756,012
Commitments and contingencies (note 13)			-				-
Stockholders' equity:
Preferred stock, $0.0001 par value; 10,000 shares authorized, and zero shares issued and outstanding at March 31, 2021 and December 31, 2020			-				-
Common stock, $0.0001 par value; 200,000 shares authorized at March 31, 2021 and December 31, 2020; 80,438 shares issued and outstanding at March 31, 2021, and 76,130 shares issued and outstanding at December 31, 2020			8				8
Additional paid-in capital			1,147,263				1,131,013
Accumulated other comprehensive loss			(1,620	)			(117	)
Accumulated deficit			(1,093,993	)			(926,347	)
Total stockholders' equity			51,658				204,557
Total liabilities and stockholders' equity		$	810,129			$	960,569

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,
	2021				2020
	(Unaudited)
Operating expenses:
Research and development		84,012				69,282
General and administrative		40,579				29,504
Operating loss		(124,591	)			(98,786	)
Loss on extinguishment of debt		(39,487	)			—
Loss from remeasurement of development derivative liability		(17,084	)			(68,406	)
Interest expense		134				2,275
Interest income		(4,175	)			(3,919	)
Other income, net		1,544				14
Net loss		(183,659	)			(168,822	)
Other comprehensive loss:
Unrealized gain on marketable securities		79				1,394
Foreign currency loss		(1,582	)			(230	)
Total other comprehensive loss		(1,503	)			1,164
Comprehensive loss, net of tax	$	(185,162	)		$	(167,658	)
Net loss per common share, basic and diluted	$	(2.32	)		$	(2.29	)
Weighted-average number of common shares used in net loss per common share, basic and diluted		79,219				73,720

FAQ

What is the status of pegcetacoplan's FDA approval for APLS?

The FDA is reviewing pegcetacoplan for PNH with a target action date of May 14, 2021.

When will Apellis report top-line results from its Phase 3 PRINCE study?

Top-line results from the Phase 3 PRINCE study are expected in the second quarter of 2021.

What are Apellis' cash reserves as of March 31, 2021?

As of March 31, 2021, Apellis had cash and investments totaling $723.7 million.

What was Apellis' net loss for Q1 2021?

Apellis reported a net loss of $183.7 million for the first quarter of 2021.

What are the expected developments for Apellis in 2021?

Apellis anticipates significant results from ongoing Phase 3 studies and plans to advance three new product candidates into clinical development by the end of 2022.