Apellis Pharmaceuticals Reports Second Quarter 2020 Financial Results
July 31, 2020
- New Drug Application (NDA) and Marketing Authorization Application (MAA) Submissions for Pegcetacoplan in Paroxysmal Nocturnal Hemoglobinuria (PNH) Planned for the Second Half of 2020
- Phase 3 DERBY and OAKS Trials Evaluating Pegcetacoplan in Geographic Atrophy (GA) Fully Enrolled; Top-line Data Expected in the Third Quarter of 2021
- PRINCE Trial Evaluating Pegcetacoplan in Treatment-Naïve PNH Patients Fully Enrolled; Top-line Data Expected in the First Half of 2021
- Cash and Investments of $833 Million as of June 30, 2020
WALTHAM, Mass., July 31, 2020 (GLOBE NEWSWIRE) -- Apellis Pharmaceuticals, Inc. (Nasdaq: APLS), a global biopharmaceutical company and leader in targeted C3 therapies, today announced its second quarter 2020 financial results and business highlights.
“This past quarter, Apellis continued to make remarkable progress advancing our targeted C3 therapy, pegcetacoplan, for patients living with serious, complement-driven diseases,” said Cedric Francois, M.D., Ph.D., co-founder and chief executive officer of Apellis. “In PNH, we presented detailed results from the Phase 3 PEGASUS study, which showed that pegcetacoplan demonstrated substantial improvements over C5 inhibition and strengthened our belief in the potential of targeting C3 to elevate the standard of care in PNH. Following positive meetings with regulatory agencies, we are on track to submit marketing applications to the FDA and EMA later this year, and we look forward to bringing pegcetacoplan to the PNH community.
“We also completed enrollment in three Phase 3 trials while ensuring patient safety during the pandemic. These included two pivotal trials in geographic atrophy, a leading cause of blindness that affects five million people worldwide and has no approved treatment. We look forward to top-line results from these studies, as well as from our Phase 3 PRINCE trial in treatment-naïve patients with PNH, in 2021. I am proud of all that the Apellis team continues to accomplish to bring life-changing therapies to people with debilitating diseases.”
Business Highlights and Upcoming Milestones:
Subcutaneous Pegcetacoplan (APL-2)
- In July 2020, Apellis announced the completion of enrollment in the global Phase 3 PRINCE study, which is evaluating pegcetacoplan in patients with PNH who are treatment-naïve, meaning they had not received a complement inhibitor within three months before entering the trial. The company expects to report top-line results in the first half of 2021.
- In June 2020, Apellis presented detailed results from the Phase 3 PEGASUS study in an oral presentation at the 25th Congress of the European Hematology Association (EHA). New data from the pivotal study showed that the benefit of pegcetacoplan treatment was consistent across the study population, both in patients who had low or no transfusion requirements and high transfusion requirements. Pegcetacoplan also demonstrated higher normalization rates in key markers of hemolysis and clinically meaningful improvements in FACIT-fatigue score compared to eculizumab at 16 weeks.
- Apellis plans to submit an NDA to the U.S. Food and Drug Administration (FDA) and a MAA to the European Medicines Agency (EMA) for pegcetacoplan for the treatment of PNH in the second half of the year.
- The company also expects to report 48-week top-line results from the PEGASUS trial by the end of the year.
- Apellis plans to disclose the strategy and timing for further clinical development of pegcetacoplan for patients with cold agglutinin disease (CAD) and C3 glomerulopathy (C3G) in the third quarter.
- In July 2020, Apellis announced that it completed enrollment in the Phase 3 DERBY and OAKS studies investigating intravitreal pegcetacoplan for the treatment of GA secondary to age-related macular degeneration (AMD). The company expects to announce top-line results from both trials in the third quarter of 2021.
COVID-19 Clinical Program
- In May 2020, Apellis announced that it had initiated a Phase 1/2 clinical study of APL-9 in COVID-19 patients with respiratory failure including acute respiratory distress syndrome. An independent data monitoring committee (DMC) reviewed safety data from the first six patients who received open-label APL-9 and recommended that the study continue. Apellis is now enrolling an additional 60 patients into the randomized, double-blind, controlled part of the study.
Corporate & Other Highlights:
- In May 2020, Apellis announced it had entered into subscription agreements with a number of institutional investors for a private placement of $300.0 million aggregate principal amount of 3.500% convertible senior notes due in 2026, for an aggregate purchase price of $328.9 million.
Second Quarter 2020 Financial Results:
As of June 30, 2020, Apellis had $833 million in cash, cash equivalents, and short-term marketable securities, compared to $352 million in cash and cash equivalents as of December 31, 2019.
Apellis reported a net loss of $118.6 million for the second quarter of 2020, compared to a net loss of $71.1 million for the second quarter of 2019.
Research and development expenses were $87.1 million in the second quarter of 2020, compared to $50.7 million for the same period in 2019. The increase was primarily attributable to an increase of $8.8 million in contract manufacturing expenses in connection with the supply of pegcetacoplan for our Phase 3 clinical trials, an increase of $6.7 million in clinical trial costs associated with the continued enrollment of our Phase 3 clinical trials in PNH and GA, an increase of $11.0 million in personnel-related costs primarily due to the hiring of additional personnel, an increase of $4.6 million related to research and innovation activities, and an increase of $6.2 million in other development costs, and offset by a decrease of $0.9 million in pre-clinical study expenses and device development expenses. We would expect our research and development expenses to continue to increase with the number of aggregate patients enrolled in our trials and as we may add to the number of ongoing trials for subcutaneous pegcetacoplan.
General and administrative expenses were $28.4 million in the second quarter of 2020, compared to $12.8 million for the same period in 2019. The increase was primarily attributable to an increase in employee-related costs of $9.9 million, an increase in professional and consulting fees and general commercial preparation activities of $5.7 million, an increase of $0.4 million in director stock compensation expense, and an increase in $0.3 million in insurance, offset by a decrease in general office costs and conference and travel-related expenses of $0.7 million. The increase in employee-related costs of $9.9 million consisted of a $6.1 million increase in salaries and benefits primarily due to the increase in the number of employees, $3.6 million related to stock expense associated with the grant of stock options and restricted stock units to employees, and $0.2 million in recruitment expense. The increase in other professional and consulting fees and general commercial preparation activities of $5.7 million primarily related to an increase in commercial-related activity of $4.8 million, an increase of $0.9 million in general consulting fees, a $0.3 million increase in accounting, an increase in communication and public relations fees of $0.1 million, and offset by a decrease of $0.4 million legal fees.
About Pegcetacoplan (APL-2)
Pegcetacoplan is the only investigational targeted C3 therapy in late-stage clinical trials. It is designed to control excessive or uncontrolled complement activation, 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. Apellis is evaluating pegcetacoplan in several clinical studies including geographic atrophy (GA), paroxysmal nocturnal hemoglobinuria (PNH), cold agglutinin disease, and C3 glomerulopathy. Pegcetacoplan was granted Fast Track designation by the U.S. Food and Drug Administration (FDA) for the treatment of GA and the treatment of PNH. For additional information regarding our clinical trials, visit https://apellis.com/our-science/clinical-trials/.
APL-9 is an investigational drug designed to control the complement cascade centrally at C3 and may have the potential to treat a range of diseases caused by excessive or uncontrolled 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 best-in-class and first-in-class therapies for a broad range of debilitating diseases that are driven by uncontrolled or excessive activation of the complement cascade, including those within hematology, ophthalmology, nephrology, and neurology. For more information, please visit http://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 relating to the implications of preliminary clinical data. 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 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 or APL-9 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 pegcetacoplan or APL-9 will receive approval from the FDA or equivalent foreign regulatory agencies for GA, PNH, CAD, C3G, COVID-19 with respiratory failure including ARDS 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 July 30, 2020 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)|
|June 30,||December 31,|
|Cash and cash equivalents||$||317,348||$||351,985|
|Other current assets||1,828||1,308|
|Total current assets||853,825||373,095|
|Property and equipment, net||2,416||1,655|
|Liabilities and Stockholders' Equity|
|Current portion of right of use liabilities||2,664||2,609|
|Total current liabilities||57,990||65,753|
|Convertible senior notes||348,842||142,567|
|Development derivative liability||220,475||134,839|
|Operating lease liabilities||10,735||11,857|
|Preferred stock, $0.0001 par value; 10.0 million shares authorized, and zero shares issued and outstanding at June 30, 2020 and December 31, 2019||-||-|
|Common stock, $0.0001 par value; 200.0 million shares authorized at June 30, 2020 and December 31, 2019; 75.6 million shares issued and outstanding at June 30, 2020, and 63.9 million shares issued and outstanding at December 31, 2019||8||6|
|Additional paid in capital||1,100,639||615,850|
|Accumulated other comprehensive loss||329||(154||)|
|Total stockholders' equity||232,064||34,229|
|Total liabilities and stockholders' equity||$||870,106||$||389,245|
|APELLIS PHARMACEUTICALS, INC.|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS|
|For the Three Months Ended June 30,||For the Six Months Ended June 30,|
|Research and development||$||87,094||$||50,698||$||156,377||$||91,178|
|General and administrative||28,414||12,778||57,918||20,949|
|Loss on extinguishment of debt||-||-||-||(1,208||)|
|Gain/(loss) from remeasurement of development derivative liability||2,770||(9,104||)||(65,636||)||(9,840||)|
|Other (expense)/income, net||5||228||20||(25||)|
|Other comprehensive gain/(loss):|
|Unrealized gain on marketable securities||$||(842||)||$||-||$||552||$||-|
|Foreign currency gain/(loss)||161||(1||)||(69||)||1|
|Total other comprehensive gain/(loss)||(681||)||(1||)||483||1|
|Comprehensive loss, net of tax||$||(119,298||)||$||(71,091||)||$||(286,956||)||$||(121,664||)|
|Net loss per common share, basic and diluted||$||(1.57||)||$||(1.12||)||$||(3.85||)||$||(2.01||)|
|Weighted-average number of common shares used in net loss per common share, basic and diluted||75,550||63,264||74,635||60,581|