Apellis Pharmaceuticals Reports Second Quarter 2021 Financial Results
August 9, 2021
- Received approval for EMPAVELI™ (pegcetacoplan) – the first targeted C3 therapy – from U.S. Food and Drug Administration (FDA) for treatment of adults with paroxysmal nocturnal hemoglobinuria (PNH) and launched in U.S.
- Reported positive top-line results from Phase 3 PRINCE study of EMPAVELI in treatment-naïve patients with PNH
- Established exclusive research collaboration with Beam Therapeutics to apply base editing to discover novel therapies for complement-driven diseases
- Expect top-line results from Phase 3 geographic atrophy (GA) studies in September 2021
- Conference call scheduled today at 4:30 p.m. ET
WALTHAM, Mass., Aug. 09, 2021 (GLOBE NEWSWIRE) -- Apellis Pharmaceuticals, Inc. (Nasdaq: APLS), a global biopharmaceutical company and leader in targeted C3 therapies, today announced its second quarter 2021 financial results and business highlights.
“The second quarter was an exceptional period for Apellis, underscored by the approval of EMPAVELI –– the first FDA-approved targeted C3 therapy –– for adults with PNH and a strong start to our U.S. commercial launch. We and our partner Sobi were also thrilled to report positive data from our Phase 3 PRINCE study in treatment-naïve PNH patients, emphasizing the potential for EMPAVELI to redefine treatment for all adults with PNH,” said Cedric Francois M.D., Ph.D., co-founder and chief executive officer of Apellis. “We are looking forward to the Phase 3 DERBY and OAKS readouts in September. GA is a leading cause of blindness worldwide, and we are excited about the potential to bring the first treatment to the millions of patients affected by this disease.”
“In addition to the broad platform potential of our targeted C3 therapy, our world-class research team is advancing multiple new molecular entities across several modalities, and we entered an exclusive collaboration with Beam Therapeutics to discover transformative therapies using its base editing technology. With our expanded pipeline across rare disease, ophthalmology, and neurology, we believe we are well positioned for long-term, global leadership in complement,” Dr. Francois continued.
Second Quarter 2021 Business Highlights and Upcoming Milestones:
- In May 2021, Apellis announced that the FDA approved EMPAVELI for the treatment of adults with PNH including patients who are treatment naïve, as well as patients switching from the C5 inhibitors Soliris® (eculizumab) and Ultomiris® (ravulizumab).
- EMPAVELI is available commercially in the United States. Apellis recorded $0.6 million in net product revenue for the second quarter of 2021, which reflects recorded sales of EMPAVELI upon approval by the FDA in May 2021 through June 30, 2021. Apellis did not have any net product revenue in the quarter ended June 30, 2020.
- A decision on the Marketing Authorization Application is expected by the European Commission in the second half of 2021.
- In May 2021, Apellis and Sobi announced positive top-line results from the Phase 3 PRINCE study evaluating the efficacy and safety of EMPAVELI in adults with PNH who are treatment naïve. EMPAVELI demonstrated statistical superiority on the co-primary endpoints of hemoglobin stabilization (p<0.0001) and reduction in lactate dehydrogenase (LDH) (p<0.0001) compared to standard of care, which did not include complement inhibitors, at Week 26. EMPAVELI also achieved statistical superiority on several secondary endpoints, including improvements in hemoglobin levels (p=0.0019) and transfusion avoidance (p<0.0001), compared to standard of care, which did not include complement inhibitors.
- 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). Sobi plans to initiate a Phase 3 study in cold agglutinin disease (CAD) and a potentially registrational program in hematopoietic stem cell transplantation-associated thrombotic microangiopathy (HSCT-TMA).
- Apellis expects to complete enrollment in its ongoing potentially registrational Phase 2 MERIDIAN study of EMPAVELI in amyotrophic lateral sclerosis (ALS) by the end of 2021.
- In June 2021, Apellis announced plans to study the combination of EMPAVELI and a small interfering RNA (siRNA), which may offer the potential to reduce the treatment frequency of EMPAVELI. The company expects to submit an IND for the siRNA program in 2022.
- Apellis expects to announce top-line results from the Phase 3 DERBY and OAKS studies of intravitreal pegcetacoplan in GA in September 2021.
- Apellis plans to initiate a potentially registrational study of pegcetacoplan in intermediate dry age-related macular degeneration (AMD) in 2022, if the DERBY and OAKS studies meet their primary efficacy endpoint in the monthly arm.
- In June 2021, Apellis announced plans to advance the development of APL-2006, a bispecific C3 and VEGF inhibitor, as a next-generation treatment for wet AMD. The company expects to submit an IND for this program in 2022.
- In June 2021, Apellis announced plans to advance the development of APL-1030, a first-in-class, brain-active C3 inhibitor, for neurodegenerative diseases. The company expects to submit an IND for this program in 2022.
- In June 2021, Apellis and Beam Therapeutics announced an exclusive five-year research collaboration focused on the use of Beam’s proprietary base editing technology to discover new treatments for complement-driven diseases. The companies will collaborate on six research programs focused on C3 and other complement targets in the eye, liver, and brain. This collaboration combines Apellis’ expertise in complement with Beam’s proprietary base editing platform.
- In July 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 $201.1 million in aggregate principal amount of Notes held by them for an aggregate of 5,992,217 shares of its common stock. The exchange transactions closed on July 26, 2021.
Second Quarter 2021 Financial Results:
As of June 30, 2021, Apellis had $599.0 million in cash, cash equivalents, and short-term marketable securities, compared to $877.6 million in cash, cash equivalents, and short-term marketable securities as of December 31, 2020.
Apellis reported a net loss of $219.2 million for the second quarter of 2021, compared to a net loss of $118.6 million for the same period in 2020.
Net product revenues for the second quarter of 2021 were $0.6 million, which reflects recorded sales of EMPAVELI upon approval by the FDA in May 2021 through June 30, 2021. Apellis did not have any net product revenue in the quarter ended June 30, 2020.
Research and development (R&D) expenses were $145.9 million in the second quarter of 2021, compared to $87.1 million for the same period in 2020. The increase in R&D expense was primarily attributable to $50.0 million associated with the Beam collaboration, increased quality and medical affairs expenses, personnel-related costs primarily due to the hiring of additional personnel, an increase in clinical trial costs associated with the ongoing Phase 3 studies and the preparation and commencement of our clinical trials in other indications and increased pre-clinical study expenses as we continue to perform research related to our product candidates. These expenses were offset by contra R&D expense related to the Sobi transaction and a decrease in contract manufacturing expenses due primarily to the timing of drug supply and analytical activity as well as the capitalization of inventory following FDA approval of EMPAVELI.
General and administrative (G&A) expenses were $49.0 million in the second quarter of 2021, compared to $28.4 million for the same period in 2020. The increase in G&A expenses for the second quarter 2021 was primarily attributable to general commercial preparation activities, an increase in employee-related costs, professional and consulting fees, director stock compensation expense, and insurance.
Conference Call and Webcast
Apellis will host a conference call and webcast to discuss its second quarter 2021 financial results and business highlights today, August 9, 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 5762347. 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 EMPAVELI™ (pegcetacoplan)
EMPAVELI™ (pegcetacoplan) is the first and only approved therapy targeting C3, the central protein in the complement cascade. EMPAVELI acts proximally in the complement cascade controlling both C3b-mediated extravascular hemolysis and terminal complement-mediated intravascular hemolysis. EMPAVELI is approved in the United States for the treatment of adults with paroxysmal nocturnal hemoglobinuria (PNH).
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.
- 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.
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.
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.
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.
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.
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 filed with the Securities and Exchange Commission on August 9, 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)|
|June 30,||December 31,|
|Cash and cash equivalents||$||270,764||$||565,779|
|Other current assets||31,228||26,878|
|Total current assets||655,126||917,192|
|Property and equipment, net||6,750||6,803|
|Liabilities and Stockholders' Equity|
|Current portion of development derivative liability||14,110||4,230|
|Current portion of right of use liabilities||4,035||3,685|
|Total current liabilities||157,787||128,327|
|Convertible senior notes||386,471||358,830|
|Development derivative liability||278,022||253,638|
|Operating lease liabilities||19,125||15,217|
|Commitments and contingencies (Note 13)||-||-|
|Preferred stock, $0.0001 par value; 10,000 shares authorized, and zero shares issued and outstanding at June 30, 2021 and December 31, 2020||-||-|
|Common stock, $0.0001 par value; 200,000 shares authorized at June 30, 2021 and December 31, 2020; 80,956 shares issued and outstanding at June 30, 2021, and 76,130 shares issued and outstanding at December 31, 2020||8||8|
|Additional paid-in capital||1,173,512||1,131,013|
|Accumulated other comprehensive loss||(1,829||)||(117||)|
|Total stockholders' equity||(141,493||)||204,557|
|Total liabilities and stockholders' equity||$||699,912||$||960,569|
|APELLIS PHARMACEUTICALS, INC.|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS|
|(Amounts in thousands, except per share amounts)|
|For the three months ended June 30,||For the six months ended June 30,|
| (Unaudited)|| (Unaudited)|
|Product revenue, net||$||623||$||—||$||623||$||—|
|Research and development||95,943||87,094||179,955||156,377|
|Cost of research collaboration||50,000||-||50,000||-|
|General and administrative||48,967||28,414||89,546||57,918|
|Total operating expenses:||194,910||115,508||319,501||214,295|
|Net operating loss||(194,287||)||(115,508||)||(318,878||)||(214,295||)|
|Loss on conversion of debt||—||—||(39,487||)||—|
|Loss from remeasurement of development derivative liability||(21,180||)||2,770||(38,264||)||(65,636||)|
|Other income, net||(61||)||5||1,483||20|
|Other comprehensive gain/(loss):|
|Unrealized gain/(loss) on marketable securities||(35||)||(842||)||44||552|
|Foreign currency gain/(loss)||(174||)||161||(1,756||)||(69||)|
|Total other comprehensive gain/(loss)||(209||)||(681||)||(1,712||)||483|
|Comprehensive loss, net of tax||$||(219,400||)||$||(119,298||)||$||(404,562||)||$||(286,956||)|
|Net loss per common share, basic and diluted||$||(2.72||)||$||(1.57||)||$||(5.04||)||$||(3.85||)|
|Weighted-average number of common shares used in net loss per common share, basic and diluted||80,654||75,550||79,938||74,635|