Apellis Pharmaceuticals Reports Fourth Quarter and Full Year 2020 Financial Results
February 25, 2021
- Marketing applications for pegcetacoplan for the treatment of paroxysmal nocturnal hemoglobinuria (PNH) under review by the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA). PDUFA target action date is 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 the 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 $877.6 million as of December 31, 2020 support cash runway into the second half of 2022
- Conference call scheduled today at 4:30 p.m. ET
WALTHAM, Mass., Feb. 25, 2021 (GLOBE NEWSWIRE) -- Apellis Pharmaceuticals, Inc. (Nasdaq: APLS), a global biopharmaceutical company and leader in targeted C3 therapies, today announced its fourth quarter and full year 2020 financial results and business highlights.
“2020 was a defining year for Apellis, marked by positive Phase 3 PEGASUS data, which highlighted both the potential of pegcetacoplan to elevate the standard of care in PNH and the broad platform potential of targeting C3 for complement-driven diseases,” said Cedric Francois M.D., Ph.D., co-founder and chief executive officer of Apellis. “In 2021, we look forward to a transformational year for Apellis as we further build on our global leadership in complement.
“With a potential U.S. product approval and commercial launch in PNH in the first half of the year, Phase 3 study readouts in geographic atrophy in the third quarter, and multiple clinical development milestones across our systemic pipeline, we are positioned to deliver on the full potential of targeting C3 across multiple diseases with high unmet need,” Dr. Francois continued. “Importantly, we have a unique opportunity to advance the first potential medicine for geographic atrophy, a leading cause of blindness that affects approximately five million people around the world.”
Fourth Quarter Business Highlights and Upcoming Milestones:
- In December 2020, Apellis and Sobi announced positive top-line results at Week 48 from the Phase 3 PEGASUS study, which found that treatment with pegcetacoplan, an investigational targeted C3 therapy, resulted in sustained hematological and clinical improvements in patients with paroxysmal nocturnal hemoglobinuria (PNH). The safety profile of pegcetacoplan was consistent with previously reported data.
- In December 2020, the company reported additional analyses from the Phase 3 PEGASUS study, demonstrating statistically significant improvements in overall treatment response and substantial quality-of-life improvements with pegcetacoplan for PNH compared to Soliris® (eculizumab) at 16 weeks. Additionally, a matching-adjusted indirect comparison (MAIC) suggested improvements in clinical, hematological, and quality-of-life outcomes in patients treated with pegcetacoplan compared to Ultomiris® (ravulizumab), a longer-acting C5 inhibitor. The data were presented at the virtual American Society of Hematology Annual Meeting (ASH).
- In November 2020, Apellis and Sobi announced that the first patient had been dosed in the potentially registrational Phase 2 MERIDIAN study of pegcetacoplan, which is expected to enroll more than 200 adults with sporadic amyotrophic lateral sclerosis (ALS). The companies expect to complete study enrollment in the second half of 2021.
- In November 2020, the company announced that the FDA accepted and granted Priority Review designation for the New Drug Application (NDA) for pegcetacoplan for the treatment of PNH, with a Prescription Drug User Fee Act (PDUFA) target action date of May 14, 2021. A Marketing Authorization Application (MAA) is also under review by the EMA with the potential for a European Commission decision on the MAA in the second half 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 quarter of 2021.
- 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).
- In November 2020, Apellis announced findings from the largest retrospective study in GA, which underscored the high unmet need for a treatment in geographic atrophy. Conducted in partnership with Verana Health, the analysis of the American Academy of Ophthalmology (AAO) IRIS® Registry was presented in a late-breaking oral session at AAO 2020. Results showed that visual acuity substantially worsened over a brief time, with a significant percentage of GA patients becoming ineligible to drive and legally blind within one to two years of diagnosis. The data also reiterated that wet AMD is an expected occurrence in people with GA, which happens nearly three times more frequently in people with wet AMD in the fellow eye than in people with bilateral GA (13.3% vs. 4.7%, respectively, over 12 months).
- The company expects to announce top-line results from the Phase 3 DERBY and OAKS studies in the third quarter of 2021.
COVID-19 Clinical Program with APL-9
- Apellis expects to report top-line data from its Phase 1/2 clinical study of APL-9, a targeted C3 therapy designed for acute conditions, in patients with severe COVID-19 in the second quarter of 2021.
- Apellis plans to advance three new product candidates into clinical development by the end of 2022.
- In January 2021, Apellis announced that it entered into separate, privately negotiated exchange agreements with certain holders of its 3.500% Convertible Senior Notes due 2026 issued in September 2019. Under the terms of the exchange agreements, the holders agreed to exchange with Apellis approximately $126.1 million in aggregate principal amount of Notes held by them for an aggregate of 3,906,869 shares of its common stock. The exchange transactions closed on January 25, 2021.
Fourth Quarter and Full Year 2020 Financial Results:
As of December 31, 2020, Apellis had $877.6 million in cash, cash equivalents, and short-term marketable securities, compared to $352.0 million in cash and cash equivalents as of December 31, 2019. This increase primarily reflects the addition of cash from the company’s follow-on offering for gross proceeds of $404.2 million in January 2020, a convertible offering for gross proceeds of $328.9 million in May 2020, and the receipt of $250.0 million in the upfront proceeds for the Sobi transaction in October 2020, less cash used in operations.
Apellis reported net income of $78.3 million for the fourth quarter of 2020, compared to a net loss of $113.2 million for the fourth quarter of 2019. This change was due to the Sobi upfront payment, which was recognized as revenue in the fourth quarter. For the full year ending December 31, 2020, Apellis reported a net loss of $344.9 million, compared to a net loss of $304.7 million for the full year ending December 31, 2019.
Research and development expenses were $75.4 million in the fourth quarter of 2020, compared to $78.5 million for the same period in 2019. For the full year ending December 31, 2020, research and development expenses were $325.0 million compared to $221.0 million for the full year ending December 31, 2019. The increase in R&D expense for full year 2020 was primarily attributable to an increase in manufacturing expenses in connection with the supply of pegcetacoplan for the company’s Phase 3 clinical trials and potential commercial launch, clinical trial costs associated with the ongoing Phase 3 trials and planned clinical trials in other indications, compensation and related personnel costs primarily due to the hiring of additional personnel, regulatory and quality expenses, licensee fee to Penn related to the Sobi transaction, research and innovation expense, and device development 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 $44.5 million in the fourth quarter of 2020, compared to $27.5 million for the same period in 2019. For the full year ending December 31, 2020, general and administrative expenses were $139.4 million, compared to $67.0 million for the full year ending December 31, 2019. The increase in general and administrative expenses for the full year 2020 was primarily attributable to an increase in professional and consulting fees, employee-related costs due to the hiring of additional personnel, directors stock compensation expense, insurance costs, and office, travel and related costs, offset by a decrease in information technology expenses.
Conference Call and Webcast
Apellis will host a conference call and webcast to discuss its fourth quarter and full year 2020 financial results and business highlights today, February 25, 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 6956712. 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.
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 FDA for the treatment of geographic atrophy and received orphan drug designation for the treatment of C3G by the FDA and EMA. For additional information regarding pegcetacoplan clinical trials, visit https://apellis.com/our-science/clinical-trials.
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.
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’ Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 25, 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.
|APELLIS PHARMACEUTICALS, INC.|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|(Amounts in thousands, except per share amounts)|
|Cash and cash equivalents||$||565,779||$||351,985|
|Other current assets||26,878||1,308|
|Total current assets||917,192||373,095|
|Property and equipment, net||6,803||1,655|
|Liabilities and Stockholders' Equity|
|Current portion of development derivative liability||4,230||-|
|Current portion of right-of-use liabilities||3,685||2,609|
|Total current liabilities||128,327||65,753|
|Convertible senior notes||358,830||142,567|
|Development derivative liability||253,638||134,839|
|Commitments and contingencies (note 15)||-||-|
|Preferred stock, $0.0001 par value; 10,000 shares authorized and zero shares issued and outstanding at December 31, 2020 and 2019||-||-|
|Common stock, $0.0001 par value; 200,000 shares authorized at December 31, 2020 and 2019; 76,130 and 63,938 shares issued and outstanding at December 31, 2020 and 2019, respectively||8||6|
|Additional paid-in capital||1,131,013||615,850|
|Accumulated other comprehensive loss||(117||)||(154||)|
|Total stockholders' equity||204,557||34,229|
|Total liabilities and stockholders' equity||$||960,569||$||389,245|
|APELLIS PHARMACEUTICALS, INC.|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS|
|(Amounts in thousands, except per share amounts)|
|For the three months ended December 31,||Year Ended December 31,|
|Research and development||50,337||78,471||299,921||220,969|
|General and administrative||44,492||27,469||139,401||67,046|
|Loss on extinguishment of debt||—||—||—||(1,501||)|
|Loss from remeasurement of development derivative liability||(40,090||)||(4,736||)||(103,029||)||(14,839||)|
|Other income (expense), net||(505||)||(89||)||(501||)||(175||)|
|Net loss before taxes||80,110||(113,217||)||(343,029||)||(304,707||)|
|Income tax expense||1,845||—||1,845||-|
|Other comprehensive loss:|
|Unrealized gain loss||(130||)||—||(8||)||—|
|Foreign currency gain/(loss)||1,772||51||45||(31||)|
|Total other comprehensive loss||1,642||51||37||(31||)|
|Comprehensive income/(loss), net of tax||$||79,907||$||(113,166||)||$||(344,837||)||$||(304,738||)|
|Net income/(loss) per common share, basic||$||1.03||$||(1.77||)||$||(4.59||)||$||(4.90||)|
|Net income/(loss) per common share, diluted||$||0.93||$||(1.77||)||$||(4.59||)||$||(4.90||)|
|Weighted-average number of common shares used in net loss per common share, basic||75,875||63,901||75,163||62,229|
|Weighted-average number of common shares used in net loss per common share, diluted||94,321||63,901||75,163||62,229|