Apellis Pharmaceuticals Reports First Quarter 2022 Financial Results

Rhea-AI Summary

Apellis Pharmaceuticals reported $12.1 million in U.S. net product revenues for EMPAVELI® (pegcetacoplan) in Q1 2022, with total revenues reaching $14.4 million. The company is on track to submit a New Drug Application (NDA) for pegcetacoplan in geographic atrophy by Q2 2022 and completed enrollment in a Phase 2 study for amyotrophic lateral sclerosis (ALS). Cash and investments totaled $965.3 million as of March 31, 2022, ensuring a runway into Q1 2024. Despite a net loss of $138.9 million, the firm is optimistic about its growth trajectory.

Positive

• Q1 2022 U.S. net product revenue of $12.1 million for EMPAVELI.
• Total revenue increased to $14.4 million.
• Strong cash position with $965.3 million available, extending runway into Q1 2024.
• NDA submission for pegcetacoplan in geographic atrophy expected in Q2 2022.

Negative

• Net loss of $138.9 million in Q1 2022, though improved from $183.7 million in Q1 2021.
• R&D expenses rose to $90.9 million, increasing operational costs.

• Generated $12.1 million in Q1 2022 EMPAVELI^® (pegcetacoplan) U.S. net product revenues
• Reported 18-month data with intravitreal pegcetacoplan in geographic atrophy (GA); on track to submit NDA in 2Q 2022
• Completed enrollment in potentially registrational Phase 2 study in amyotrophic lateral sclerosis (ALS); data expected mid-2023
• Cash and investments of $965.3 million as of March 31, 2022 with expected cash runway into Q1 2024
• Conference call scheduled today at 4:30 p.m. ET
  

WALTHAM, Mass., May 04, 2022 (GLOBE NEWSWIRE) -- Apellis Pharmaceuticals, Inc. (Nasdaq: APLS), a global biopharmaceutical company and leader in complement, today announced its first quarter 2022 financial results and business highlights.

“2022 is a transformational year for Apellis, and the first quarter has cemented our path,” said Cedric Francois M.D., Ph.D., co-founder and chief executive officer of Apellis. “We announced 18-month results from our Phase 3 DERBY and OAKS studies in geographic atrophy, showing continuous and clinically meaningful reductions in lesion growth over time. We continue to be impressed by these results, which reinforce the potential for pegcetacoplan to be the first-ever treatment for the millions of patients living with GA, and we remain firmly on track to submit our NDA this quarter.”  

Dr. Francois continued, “We also remain excited by EMPAVELI’s strong launch in the U.S., and the opportunity to bring EMPAVELI to PNH patients globally with our partner Sobi. Beyond PNH, we are continuing to advance EMPAVELI as a novel therapy for other rare and debilitating diseases. We look forward to building on this momentum as we further execute our pipeline and continue to strengthen our position as the global leader in complement.”

First Quarter 2022 Business Highlights and Upcoming Milestones:

Paroxysmal Nocturnal Hemoglobinuria (PNH) Commercial Progress

• Apellis recorded $12.1 million in EMPAVELI^® (pegcetacoplan) U.S. net product revenue for the first quarter of 2022.
• In early 2022, approvals for pegcetacoplan in PNH were received in the United Kingdom, Saudi Arabia and Australia. Aspaveli® (pegcetacoplan) was approved in the European Union in December 2021.
  • Apellis earned a $50.0 million milestone payment from Sobi following first regulatory approval and reimbursement in Europe. Apellis recorded the full amount as revenue in the fourth quarter of 2021, in line with U.S. GAAP, and received the cash payment in April 2022.
• Apellis announced that renowned hematologist, Peter Hillmen, MB ChB, PhD, will join the company as Head of Hematology Engagement, effective May 23, 2022.

Rare Disease R&D Highlights

• Amyotrophic lateral sclerosis (ALS): In the first quarter of 2022, Apellis completed enrollment in its ongoing and potentially registrational Phase 2 MERIDIAN study with systemic pegcetacoplan for ALS. Top-line results are expected in mid-2023.
• Immune complex membranoproliferative glomerulonephritis (IC-MPGN) and C3 glomerulopathy (C3G): Apellis expects to initiate a Phase 3 study of systemic pegcetacoplan for IC-MPGN/C3G in the second quarter of 2022.
• Cold agglutinin disease (CAD): Sobi expects to initiate a Phase 3 study of systemic pegcetacoplan for CAD in the second quarter of 2022.
• Hematopoietic stem cell transplantation-associated thrombotic microangiopathy (HSCT-TMA): In early 2022, Sobi dosed the first patient into its Phase 2 study evaluating the efficacy and safety of systemic pegcetacoplan in patients with HSCT-TMA.
• EMPAVELI + small interfering RNA (siRNA): Apellis is studying the combination of EMPAVELI and an siRNA, which may offer the potential to reduce the treatment frequency of EMPAVELI. Apellis expects to submit an Investigational New Drug (IND) application for its siRNA in the first half of 2023.
• Complement + gene therapy: Apellis is evaluating the role of C3 inhibition as an approach to enabling AAV-delivered gene therapies, with the potential to increase safety and tolerability, decrease the dose needed, and allow for dosing in patients with pre-existing antibodies.
  • Apellis is collaborating with multiple partners to evaluate the role of complement with AAV administration. In collaboration with Spark Therapeutics, Inc., in vitro data combining APL-9 with AAV administration is being shared in an oral presentation at the ASGCT Annual Meeting on May 16, 2022.
    

Ophthalmology R&D Highlights

• Geographic atrophy (GA) secondary to age-related macular degeneration (AMD):
  • Apellis continues to expect to submit the New Drug Application (NDA) in the second quarter of 2022.
  • In March 2022, Apellis shared 18-month data from the Phase 3 DERBY and OAKS studies with intravitreal pegcetacoplan demonstrating continuous and clinically meaningful reductions in GA lesion growth and a favorable safety profile. All nominal p-values were below 0.05 across treatment arms in both DERBY and OAKS.
    • Additional data presented at the ARVO Annual Meeting in May 2022 showed that monthly and every-other-month intravitreal pegcetacoplan continued to demonstrate a robust effect in patients with extrafoveal lesions and showed an improved effect in patients with foveal lesions at month 18.
  • In April 2022, Apellis shared results from the global Geographic Atrophy Insights Survey (GAINS) which revealed the emotional burden and impact on independence for patients living with GA. GAINS was conducted by The Harris Poll and sponsored by Apellis.
  • Apellis plans to submit a Marketing Authorization Application (MAA) in Europe in the second half of 2022.
• APL-2006: Apellis expects to submit an IND for APL-2006, a bispecific C3 and VEGF inhibitor and potential next generation wet-AMD therapy, in the first half of 2023.
  

Neurology R&D Highlights

• APL-1030: Apellis expects to submit an IND for APL-1030, a first-in-class, brain-active C3 inhibitor for neurodegenerative diseases, in the second half of 2022.
  

First Quarter 2022 Financial Results:

Cash. As of March 31, 2022, Apellis had $965.3 million in cash, cash equivalents, and short-term marketable securities, compared to $723.7 million in cash, cash equivalents, and short-term marketable securities as of March 31, 2021. This includes $380.1 million in net proceeds received from the follow-on offering completed in March 2022.

Total Revenue. Total revenue was $14.4 million for the first quarter of 2022, which consisted of $12.1 million in net product revenue from sales of EMPAVELI and $2.3 million in revenue associated with the Sobi collaboration.

Research and Development (R&D) Expenses.

• R&D expenses were $90.9 million for the first quarter of 2022, compared to $84.0 million for the same period in 2021.
• The increase in R&D expenses for the first quarter of 2022 was primarily attributable to an increase in personnel-related costs due to the hiring of personnel, an increase in other research and development and other supporting activities and a decrease in contra research and development expense related to the Sobi collaboration. These increases were offset by lower contract manufacturing expenses in 2021 due primarily to the timing of drug supply and analytical activity as well as the capitalization of inventory following FDA approval of EMPAVELI and decreased clinical trial costs.

General and Administrative (G&A) Expenses.

• G&A expenses were $51.2 million for the first quarter of 2022, compared to $40.6 million for the same period in 2021.
• The increase in G&A expenses for the first quarter of 2022 was primarily attributable to an increase in employee-related costs and general commercial preparation activities.

Net Loss (Income). Apellis reported a net loss of $138.9 million for the first quarter of 2022, compared to a net loss of $183.7 million for the same period in 2021.

Conference Call and Webcast
Apellis will host a conference call and webcast to discuss its first quarter 2022 financial results and business highlights today, May 4, 2022, at 4:30 p.m. ET. To access the live call by phone, please pre-register for the call here. The conference ID is 7978519. 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 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. EMPAVELI is approved for the treatment of paroxysmal nocturnal hemoglobinuria (PNH) in the United States, Australia, and Saudi Arabia, and Aspaveli, which is the European trade name for pegcetacoplan, is approved in the European Union and the United Kingdom. The therapy is also under investigation for several other rare diseases across hematology, nephrology, and neurology.

U.S. Important Safety Information for EMPAVELI

BOXED WARNING: SERIOUS INFECTIONS CAUSED BY ENCAPSULATED BACTERIA

• Meningococcal infections may occur in patients treated with EMPAVELI and may become rapidly life-threatening or fatal if not recognized and treated early. Use of EMPAVELI may predispose individuals to serious infections, especially those caused by encapsulated bacteria, such as Streptococcus pneumoniae, Neisseria meningitidis types A, C, W, Y, and B, and Haemophilus influenzae type B.
• Comply with the most current Advisory Committee on Immunization Practices (ACIP) recommendations for vaccinations against encapsulated bacteria.
• Vaccinate patients at least 2 weeks prior to administering the first dose of EMPAVELI unless the risks of delaying therapy with EMPAVELI outweigh the risk of developing a serious infection.
• Vaccination reduces, but does not eliminate, the risk of serious infections. Monitor patients for early signs of serious infections and evaluate immediately if infection is suspected.
• EMPAVELI is available only through a restricted program under a Risk Evaluation and Mitigation Strategy (REMS). Under the EMPAVELI REMS, prescribers must enroll in the program.
  

CONTRAINDICATIONS

• Hypersensitivity to pegcetacoplan or to any of the excipients
• Not currently vaccinated against certain encapsulated bacteria, unless the risks of delaying EMPAVELI treatment outweigh the risks of developing a bacterial infection with an encapsulated organism
• Unresolved serious infection caused by encapsulated bacteria including Streptococcus pneumoniae, Neisseria meningitidis, and Haemophilus influenzae
  

WARNINGS AND PRECAUTIONS

Serious Infections Caused by Encapsulated Bacteria
The use of EMPAVELI may predispose individuals to serious, life-threatening, or fatal infections caused by encapsulated bacteria, including Streptococcus pneumoniae, Neisseria meningitidis types A, C, W, Y, and B, and Haemophilus influenzae type B (Hib). To reduce the risk of infection, all patients must be vaccinated against these bacteria according to the most current ACIP recommendations for patients with altered immunocompetence associated with complement deficiencies. Revaccinate patients in accordance with ACIP recommendations considering the duration of therapy with EMPAVELI.

For patients without known history of vaccination, administer required vaccines at least 2 weeks prior to receiving the first dose of EMPAVELI. If immediate therapy with EMPAVELI is indicated, administer required vaccine as soon as possible and provide patients with 2 weeks of antibacterial drug prophylaxis.

Closely monitor patients for early signs and symptoms of serious infection and evaluate patients immediately if an infection is suspected. Promptly treat known infections. Serious infection may become rapidly life-threatening or fatal if not recognized and treated early. Consider discontinuation of EMPAVELI in patients who are undergoing treatment for serious infections.

EMPAVELI REMS
Because of the risk of serious infections, EMPAVELI is available only through a restricted program under a REMS. Under the EMPAVELI REMS, prescribers must enroll in the program and must counsel patients about the risk of serious infection, provide the patients with the REMS educational materials, and ensure patients are vaccinated against encapsulated bacteria. Enrollment and additional information are available by telephone: 1-888-343-7073 or at www.empavelirems.com.

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
The most common adverse reactions (incidence ≥10% of patients) with EMPAVELI vs. eculizumab were injection-site reactions (39% v. 5%), infections (29% v. 26%), diarrhea (22% v. 3%), abdominal pain (20% v. 10%), respiratory tract infection (15% v. 13%), viral infection (12% v. 8%), and fatigue (12% v. 23%).

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 is committed to leveraging courageous science, creativity, and compassion to deliver life-changing therapies. Leaders in complement, we ushered in the first new class of complement medicine in 15 years with the approval of the first and only targeted C3 therapy. We are advancing this science to continually develop transformative medicines for people living with rare, retinal, 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 timing of anticipated regulatory submissions. 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 results of the FILLY, DERBY, and OAKS trials are sufficient to support regulatory submissions; whether a submission for approval of intravitreal pegcetacoplan for GA on the basis of the FILLY, DERBY and OAKS trials will be accepted by the FDA or foreign regulatory agencies; whether intravitreal pegcetacoplan will receive approval from the FDA or equivalent foreign regulatory agencies for GA when expected or at all; whether the company’s clinical trials will be fully enrolled and completed when anticipated; whether preliminary or interim results from a clinical trial will be predictive of the final results of the trial; whether results obtained in preclinical studies and 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 for any indication on a timely basis, or at all; whether the results of the company’s clinical trials will warrant regulatory submissions and whether pegcetacoplan will receive approval from the FDA or equivalent foreign regulatory agencies for CAD, C3G, IC-MPGN, HSCT-TMA, ALS or any other indication when expected or at all; whether, if Apellis’ products receive approval, they will be successfully distributed and marketed; and other factors discussed in the “Risk Factors” section of Apellis’ Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2022 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,
			2022				2021
Assets
Current assets:
Cash and cash equivalents		$	633,456			$	640,192
Marketable securities			331,842				60,358
Accounts receivable			6,330				10,103
Inventory			32,850				16,286
Prepaid assets			24,534				24,868
Restricted cash			1,558				1,563
Other current assets			73,412				70,677
Total current assets			1,103,982				824,047
Non-current assets:
Right-of-use assets			19,972				19,901
Property and equipment, net			5,893				6,177
Other assets			16,007				31,640
Total assets		$	1,145,854			$	881,765
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	12,273			$	16,909
Accrued expenses			105,272				103,239
Current portion of development liability			2,664				7,584
Current portion of right of use liabilities			4,560				4,115
Total current liabilities			124,769				131,847
Long-term liabilities:
Long-term development liability			351,784				345,151
Convertible senior notes			189,168				189,024
Right-of-use liabilities			16,690				17,081
Other liabilities			1,208				—
Total liabilities			683,619				683,103
Commitments and contingencies (Note 14)			—				—
Stockholders' equity:
Preferred stock, $0.0001 par value; 10,000 shares authorized and zero shares issued and outstanding at March 31, 2022 and December 31, 2021			—				—
Common stock, $0.0001 par value; 200,000 shares authorized at March 31, 2022 and December 31, 2021; 106,440 shares issued and outstanding at March 31, 2022, and 97,524 shares issued and outstanding at December 31, 2021			11				10
Additional paid-in capital			2,259,906				1,857,430
Accumulated other comprehensive loss			(2,059	)			(2,090	)
Accumulated deficit			(1,795,623	)			(1,656,688	)
Total stockholders' equity			462,235				198,662
Total liabilities and stockholders' equity		$	1,145,854			$	881,765

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,
		2022				2021
Revenue:
Product revenue, net	$	12,109			$	—
Licensing and other revenue		2,272				—
Total revenue:		14,381				—
Operating expenses:
Cost of sales		1,247				—
Research and development		90,945				84,012
General and administrative		51,187				40,579
Operating expenses:		143,379				124,591
Net operating income/(loss)		(128,998	)			(124,591	)
Loss on conversion of debt		—				(39,487	)
Loss from remeasurement of development derivative liability		—				(17,084	)
Interest income		98				134
Interest expense		(8,538	)			(4,175	)
Other (expense)/income, net		(289	)			1,544
Net loss before taxes		(137,727	)			(183,659	)
Income tax expense		1,208				—
Net income/(loss)	$	(138,935	)		$	(183,659	)
Other comprehensive (loss)/gain:
Unrealized (loss)/gain on marketable securities		(52	)			79
Foreign currency gain/(loss)		83				(1,582	)
Total other comprehensive income/(loss)		31				(1,503	)
Comprehensive loss, net of tax	$	(138,904	)		$	(185,162	)
Net loss per common share, basic and diluted	$	(1.42	)		$	(2.32	)
Weighted-average number of common shares used in net loss per common share, basic and diluted		98,069				79,219

FAQ

What were Apellis Pharmaceuticals' Q1 2022 revenues?

Apellis reported total revenues of $14.4 million for Q1 2022, including $12.1 million from EMPAVELI.

What is the expected NDA submission timeline for pegcetacoplan?

Apellis plans to submit the NDA for pegcetacoplan in geographic atrophy in Q2 2022.

What is Apellis Pharmaceuticals' cash position as of March 31, 2022?

The company had $965.3 million in cash, cash equivalents, and short-term marketable securities.

What was the net loss for Apellis in Q1 2022?

Apellis reported a net loss of $138.9 million for Q1 2022.

When are the top-line results for the ALS study expected?

Top-line results from the Phase 2 study for ALS are expected in mid-2023.