Apellis Pharmaceuticals Reports Third Quarter 2020 Financial Results
November 2, 2020
- Strategic collaboration announced with Sobi for global co-development and exclusive ex-U.S. commercialization rights for systemic pegcetacoplan
- Marketing authorization application (MAA) validated by EMA for pegcetacoplan in PNH. New drug application (NDA) filing decision by FDA expected in the fourth quarter of 2020
- Late-breaking oral presentation at EURETINA demonstrated that intravitreal pegcetacoplan slowed progression of early disease in patients with geographic atrophy (GA) in post hoc analysis of Phase 2 FILLY study
- Data in seven patients with bilateral GA showed a 52% decrease in mean lesion growth comparing intravitreal pegcetacoplan-treated eye versus untreated eye at 18 months (p=0.01) in post hoc analysis of Phase 1b study
- Promising 48-week Phase 2 DISCOVERY results demonstrated a 73.3% reduction in mean proteinuria in C3G patients treated with pegcetacoplan
- Cash and investments of $728.2 million as of September 30, 2020 along with $250 million upfront and other payments from Sobi support cash runway into the second half of 2022
WALTHAM, Mass., Nov. 02, 2020 (GLOBE NEWSWIRE) -- Apellis Pharmaceuticals, Inc. (Nasdaq: APLS), a global biopharmaceutical company and leader in targeted C3 therapies, today announced its third quarter 2020 financial results and business highlights.
“This has been another remarkable quarter for Apellis, culminating in our new collaboration with Sobi for global co-development and ex-U.S. commercialization of systemic pegcetacoplan for up to $1.25 billion in payments plus tiered royalties ranging from high teens to high twenties,” said Cedric Francois, M.D., Ph.D., co-founder and chief executive officer of Apellis. “This collaboration allows us to more fully explore the pipeline-in-a-product opportunity of systemic pegcetacoplan while also putting us in a position of financial strength for the Phase 3 readout in geographic atrophy next year, a program for which we retain worldwide rights.
“During the quarter, we also announced new data in several diseases including geographic atrophy, C3G, and severe COVID-19, further reinforcing the broad platform potential of our targeted C3 approach. Our team remains focused on delivering groundbreaking therapies for patients with a wide range of serious diseases, beginning with a potential U.S. launch in PNH.”
Business Highlights and Upcoming Milestones:
Systemic Pegcetacoplan (APL-2)
- In October 2020, Apellis announced a strategic collaboration with Swedish Orphan Biovitrum AB (publ) (Sobi) for the global co-development and exclusive ex-U.S. commercialization rights for systemic pegcetacoplan. Apellis retains U.S. commercialization rights for systemic pegcetacoplan and worldwide commercial rights for intravitreal pegcetacoplan. Under the terms of the agreement, Sobi will make an upfront payment to Apellis of $250 million and up to $915 million in other regulatory and commercial milestone payments and will contribute $80 million in committed reimbursement payments over a four-year period for research and development. Apellis will also be eligible for tiered double-digit royalties on sales ranging from high teens to high twenties. As part of the collaboration, the companies plan to start two new registrational programs in cold agglutinin disease (CAD) and hematopoietic stem cell transplantation-associated thrombotic microangiopathy (HSCT-TMA) in 2021.
- In October 2020, Apellis presented 48-week data from the Phase 2 DISCOVERY study of pegcetacoplan in patients with C3G at the American Society of Nephrology (ASN) Kidney Week 2020. At week 48, pegcetacoplan demonstrated sustained improvements across key clinical measures including a 73.3% reduction in mean proteinuria, an important marker of kidney damage. No serious or severe adverse events were reported, and pegcetacoplan was well tolerated overall.
- In October 2020, Apellis announced the initiation of registrational programs of pegcetacoplan in patients with immune complex membranoproliferative glomerulonephritis (IC-MPGN) or C3G and in patients with amyotrophic lateral sclerosis (ALS). The IC-MPGN / C3G registrational program consists of the recently initiated Phase 2 NOBLE study focused on the histopathology of the kidneys and a Phase 3 study that is expected to begin in the first half of 2021. The company expects the first patient to be dosed in the potentially registrational Phase 2 MERIDIAN study in ALS, Apellis’ first neurological program, by the end of 2020.
- In September 2020, Apellis announced the submission of an NDA to the U.S. Food and Drug Administration (FDA) and an MAA to the European Medicines Agency (EMA) for pegcetacoplan for the treatment of paroxysmal nocturnal hemoglobinuria (PNH). The EMA validated the MAA in October 2020, and an opinion from the Committee for Medicinal Products for Human Use (CHMP) is expected in 2021. The FDA’s decision on acceptance of the NDA and guidance on a potential Prescription Drug User Fee Act (PDUFA) target action date is expected in the fourth quarter of 2020. In October, Apellis submitted a marketing application for pegcetacoplan in PNH to the Australian Therapeutic Goods Administration (TGA). The TGA granted orphan drug designation to pegcetacoplan in PNH in September.
- The company expects to report 48-week top-line results from the PEGASUS study by the end of the year and top-line results from the Phase 3 PRINCE study in patients with PNH who are treatment-naïve in the first half of 2021.
- In October 2020, Apellis announced 18-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 52% decrease in the growth rate of GA lesions in the treated eye compared to the untreated eye in seven patients with bilateral GA (disease in both eyes) at 18 months (p=0.01).
- In October 2020, Apellis presented results of a post hoc analysis of the Phase 2 FILLY study at a late-breaking oral session at the European Society of Retina Specialists (EURETINA) 2020 Virtual Meeting. The data showed a 39% reduction in the rate of progression from nascent GA, an earlier form of disease, to GA in patients treated with pegcetacoplan monthly versus sham injections, demonstrating that intravitreal pegcetacoplan may slow early disease progression.
- 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
- In October 2020, the company announced preliminary results from a Phase 1/2 clinical study of APL-9, a targeted C3 therapy designed for acute conditions, in patients with severe COVID-19. Preliminary open-label safety data from six patients with respiratory failure, including acute respiratory distress syndrome, supported advancement of the study. Apellis is currently enrolling an additional 60 patients into the randomized, double-blind, controlled phase of the study.
- The company also announced data from an observational study in 41 patients hospitalized with COVID-19, which showed a correlation between increased complement activation and disease severity, supporting further evaluation of targeted C3 therapies for treating severe COVID-19.
Third Quarter 2020 Financial Results:
As of September 30, 2020, Apellis had $728.2 million in cash, cash equivalents, and short-term marketable securities, compared to $352 million in cash and cash equivalents as of December 31, 2019. This does not include the $250 million upfront proceeds from the Sobi transaction that was announced on October 27, 2020.
Apellis reported a net loss of $135.7 million for the third quarter of 2020, compared to a net loss of $69.8 million for the third quarter of 2019.
Research and development expenses were $93.2 million in the third quarter of 2020, compared to $51.3 million for the same period in 2019. The increase was primarily attributable to an increase of $18.0 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 $9.9 million in personnel-related costs primarily due to the hiring of additional personnel, an increase of $7.8 million related to research and innovation activities and other development costs and offset by a decrease of $0.5 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 systemic pegcetacoplan.
General and administrative expenses were $37.0 million in the third quarter of 2020, compared to $18.6 million for the same period in 2019. The increase was primarily attributable to an increase in employee-related costs of $8.2 million, an increase in professional and consulting fees and general commercial preparation activities of $9.7 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 $0.2 million. The increase in employee-related costs of $8.2 million consisted of a $5.7 million increase in salaries and benefits primarily due to the increase in the number of employees, $3.5 million related to stock expense associated with the grant of stock options and restricted stock units to employees offset by a decrease of $1.0 million in recruitment expense. The increase in other professional and consulting fees and general commercial preparation activities of $9.7 million primarily related to an increase in commercial-related activity of $6.3 million, a $2.6 million increase in legal and accounting fees, and an increase in general professional fees of $0.7 million and an increase in communication and public relations fees of $0.1 million.
About Pegcetacoplan (APL-2)
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. Apellis is evaluating pegcetacoplan in several clinical studies across hematology, ophthalmology, nephrology, and neurology. Pegcetacoplan was granted Fast Track designation by the U.S. Food and Drug Administration (FDA) for the treatment of paroxysmal nocturnal hemoglobinuria (PNH) and the treatment of geographic atrophy, and received orphan drug designation for the treatment of C3 glomerulopathy (C3G) by the FDA and European Medicines Agency. For additional information regarding our 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 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 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 will receive approval from the FDA or equivalent foreign regulatory agencies for GA, PNH, CAD, C3G, IC-MPGN, 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 November 2, 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.
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|APELLIS PHARMACEUTICALS, INC.|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|(Amounts in thousands, except per share amounts)|
|September 30,||December 31,|
|Cash and cash equivalents||$||415,560||$||351,985|
|Other current assets||1,637||1,308|
|Total current assets||742,349||373,095|
|Property and equipment, net||6,531||1,655|
|Liabilities and Stockholders' Equity|
|Current portion of right of use liabilities||3,438||2,609|
|Total current liabilities||75,273||65,753|
|Convertible senior notes||353,769||142,567|
|Development derivative liability||217,778||134,839|
|Operating lease liabilities||15,674||11,857|
|Preferred stock, $0.0001 par value; 10.0 million shares authorized, and zero shares issued and outstanding at September 30, 2020 and December 31, 2019||-||-|
|Common stock, $0.0001 par value; 200.0 million shares authorized at September 30, 2020 and December 31, 2019; 75.7 million shares issued and outstanding at June 30, 2020, and 63.9 million shares issued and outstanding at December 31, 2019||8||6|
|Additional paid in capital||1,112,203||615,850|
|Accumulated other comprehensive loss||(1,759||)||(154||)|
|Total stockholders' equity||105,840||34,229|
|Total liabilities and stockholders' equity||$||768,334||$||389,245|
|APELLIS PHARMACEUTICALS, INC.|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS|
|For the Three Months Ended September 30,||For the Nine Months Ended September 30,|
|Research and development||93,207||51,319||249,584||142,497|
|General and administrative||36,991||18,629||94,909||39,578|
|Total operating expenses:||130,198||69,948||344,493||182,075|
|Net operating loss||(129,552||)||(69,948||)||(343,847||)||(182,075||)|
|Loss on extinguishment of debt||—||(293||)||—||(1,501||)|
|Gain/(loss) from remeasurement of development derivative liability||2,697||(263||)||(62,939||)||(10,103||)|
|Other income/(expense), net||(16||)||(61||)||4||(86||)|
|Other comprehensive loss:|
|Unrealized gain/(loss) on marketable securities||(430||)||—||122||—|
|Foreign currency loss||(1,658||)||(83||)||(1,727||)||(83||)|
|Total other comprehensive loss||(2,088||)||(83||)||(1,605||)||(83||)|
|Comprehensive loss, net of tax||$||(137,788||)||$||(69,908||)||$||(424,744||)||$||(191,572||)|
|Net loss per common share, basic and diluted||$||(1.79||)||$||(1.10||)||$||(5.65||)||$||(2.79||)|
|Weighted-average number of common shares used in net loss per common share, basic and diluted||75,628||63,753||74,925||68,737|