Apellis (APLS) Q3 Loss Wider Than Expected, Syfovre Drives Sales
Apellis Pharmaceuticals, Inc. APLS reported third-quarter 2023 loss of $1.17 per share, which was wider than the Zacks Consensus Estimate of a loss of 84 cents. The company had reported a loss of $1.75 per share in the year-ago quarter.
Total revenues amounted to $110.4 million in the third quarter, surpassing the Zacks Consensus Estimate of $101 million. In the year-ago quarter, the company had reported revenues of $22.1 million. The top line jumped almost 400% year over year owing to higher sales of Syfovre (pegcetacoplan injection) in the reported quarter.
Syfovre was approved for the treatment of geographic atrophy (GA) secondary to age-related macular degeneration by the FDA in February 2023.
A marketing authorization application seeking approval of intravitreal pegcetacoplan for the treatment of GA is currently under review in Europe and several other countries. A decision regarding the same from the European Medicines Agency is expected in early 2024, while those from regulatory bodies in other countries are expected in the first half of 2024.
Year to date, shares of Apellis have lost 3.5% compared with the industry’s decline of 24.3%.
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Quarter in Detail
Revenues in the reported quarter included product sales of the marketed drugs — Empaveli (pegcetacoplan) and Syfovre — and licensing and other revenues, under the collaboration agreement with Sobi.
Syfovre recorded sales of $75.3 million in the third quarter, increasing around 12% sequentially. The medicine generated more than $160 million in sales during the first seven months of its launch in the United States, owing to continued strong demand.
Syfovre sales beat our model estimate of $50 million.
Apellis delivered more than 37,000 commercial vials and nearly 10,000 samples of Syfovre to doctors in the third quarter. As of Oct 5, 2023, the total number of vials of the drug delivered since launch was reportedly more than 100,000.
The potential approval and successful launch of Syfovre in additional geographies will add an incremental stream of revenues to APLS.
In October 2023, APLS received the permanent J-code for Syfovre, which is likely to help the company streamline the billing and reimbursement of the medicine.
Empaveli recorded sales of $23.9 million in the reported quarter, up 35% from the year-ago quarter’s figure owing to the increasing number of patient switches from AstraZeneca’s Ultomiris (ravulizumab).
However, Empaveli sales missed our model estimate of $28.8 million.
Per the company, more than 250 patients with paroxysmal nocturnal hemoglobinuria (PNH) received treatment with Empaveli as of Sep 30, 2023.
Empaveli is approved in the United States for the treatment of paroxysmal nocturnal hemoglobinuria. The drug is also approved in Europe under the brand name Aspaveli for the same indication.
Licensing and other revenues came in at $11.2 million, up 154.5% from the year-ago quarter’s figure.
Research and development expenses decreased 16.6% to $79.4 million from the prior-year quarter’s level. This was due to a decrease in contract manufacturing expenses and lower personnel-related as well as other developmental costs.
General and administrative expenses totaled $145.6 million, up 85.7% from the year-ago quarter’s figure. This was driven by higher employee-related costs and an increase in professional and consulting fees.
As of Sep 30, 2023, Apellis had cash, cash equivalents and marketable securities worth $452.4 million compared with $616.3 million as of Jun 30, 2023. APLS expects its cash balance, combined with cash anticipated to be generated from sales of marketed products as well as Sobi reimbursements, to fund its operations into the second quarter of 2025.
Pipeline & Other Updates
Last month, the FDA approved Empaveli Injector as a single-use, on-body device to enhance the self-administration of Empaveli. The injector aims to provide patients with greater mobility and convenience in managing PNH.
The Empaveli Injector is the first of its kind, offering a high-volume (20ml), subcutaneous on-body drug delivery system that can simplify the process of self-administration. APLS expects the injector to drive sales of the product.
In August 2023, Apellis started a corporate restructuring program to strengthen the growth of Empaveli and Syfovre as well as curb cash burn.
As part of this restructuring, Apellis reduced its existing workforce by about 25% (around 225 employees), which is expected to result in up to $300 million in total cost savings through 2024.
Apellis is currently enrolling patients in the phase III VALIANT study evaluating systemic pegcetacoplan for treating immune complex membranoproliferative glomerulonephritis (IC-MPGN) and C3 glomerulopathy. Data from the study are anticipated in the third quarter of 2024.
Apellis’ partner, Sobi, is currently enrolling patients in its phase II study evaluating the efficacy and safety of systemic pegcetacoplan in patients with hematopoietic stem cell transplantation-associated thrombotic microangiopathy. Data from this study are expected in 2024. Sobi is also currently enrolling patients for its phase III CASCADE study of systemic pegcetacoplan for cold agglutinin disease.
Apellis Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Apellis Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Apellis Pharmaceuticals, Inc. Quote
Zacks Rank & Other Stocks to Consider
Apellis currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the healthcare sector are Dynavax Technologies Corporation DVAX, MEI Pharma, Inc. MEIP and Ligand Pharmaceuticals Incorporated LGND, sporting a Zacks Rank #1 (Strong Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Dynavax Technologies’ 2023 loss per share have narrowed from 24 cents to 22 cents. Meanwhile, during the same period, earnings per share estimates for 2024 have improved from 2 cents to 8 cents. Year to date, shares of DVAX have rallied 32.4%.
Earnings of Dynavax Technologies beat estimates in two of the last four quarters while missing the same on the remaining two occasions. DVAX delivered a four-quarter average earnings surprise of 25.78%.
In the past 60 days, estimates for MEI Pharma’s 2023 loss per share have improved from $6.54 to $4.89. During the same period, loss per share estimates for 2024 have narrowed from $5.14 to $4.02. Year to date, shares of MEIP have rallied 44.1%.
Earnings of MEI Pharma beat estimates in three of the trailing four quarters and met the same on the other occasion. On average, MEIP came up with a four-quarter earnings surprise of 53.58%.
In the past 60 days, Ligand Pharmaceuticals’ earnings per share estimates for 2023 have improved from $4.98 to $5.10. During the same period, earnings per share estimates for 2024 have moved up from $4.26 to $4.59. Year to date, shares of LGND have lost 20.2%.
Earnings of Ligand Pharmaceuticals beat estimates in three of the trailing four quarters and missed the same on the other occasion. On average, LGND came up with a four-quarter earnings surprise of 52.47%.
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