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Apellis Pharmaceuticals Reports Fourth Quarter and Full Year 2021 Financial Results

·17 min read
Apellis Pharmaceuticals, Inc.
Apellis Pharmaceuticals, Inc.
  • Generated $15.1 million in full year 2021 EMPAVELI® (pegcetacoplan) net product revenues; demonstrated strong initial launch in U.S. and additional approvals granted worldwide

  • On track to submit NDA for intravitreal pegcetacoplan in geographic atrophy in 2Q 2022, following Phase 3 DERBY and OAKS results and completion of recent pre-NDA meeting

  • Advanced broader pipeline, including four late-stage programs with systemic pegcetacoplan and three pre-clinical programs

  • Conference call scheduled today at 4:30 p.m. ET

WALTHAM, Mass., Feb. 28, 2022 (GLOBE NEWSWIRE) -- Apellis Pharmaceuticals, Inc. (Nasdaq: APLS), a global biopharmaceutical company and leader in complement, today announced its fourth quarter and full year 2021 financial results and business highlights.

“2021 was a remarkable year for Apellis, marked by our transition from being an R&D-focused company to now also being a commercial-stage company delivering EMPAVELI, the first-ever targeted C3 therapy, to patients,” said Cedric Francois M.D., Ph.D., co-founder and chief executive officer of Apellis. “EMPAVELI has now been approved in the U.S. and several additional countries worldwide for the treatment of PNH, and we have seen a strong U.S. launch to date. Importantly, we also announced results from our Phase 3 DERBY and OAKS studies in geographic atrophy, a critical advancement for a disease with no approved treatments, and continued to advance our broader pipeline of novel therapeutics.”

Dr. Francois continued, “We are excited to build on this momentum in 2022, and with our planned NDA submission in GA during the second quarter, we look forward to potentially ending the year with two commercial products, a robust pipeline of multiple late-stage programs, and a portfolio of pre-clinical assets heading towards the clinic.”

Fourth Quarter and Full Year 2021 Business Highlights and Upcoming Milestones:

Paroxysmal Nocturnal Hemoglobinuria (PNH) Commercial Progress

  • Apellis recorded $9.2 million and $15.1 million in EMPAVELI® (pegcetacoplan) net product revenue for the fourth quarter and full year 2021, respectively.

    • In May 2021, EMPAVELI was approved by the U.S. Food and Drug Administration (FDA) for adults with PNH. This includes patients who are treatment naïve as well as patients switching from the C5 inhibitors Soliris® (eculizumab) and Ultomiris® (ravulizumab). EMPAVELI was subsequently launched in the U.S.

  • In December 2021, Aspaveli® (pegcetacoplan) was approved in the European Union as the first and only targeted C3 therapy indicated in the treatment of adult patients with PNH who are anemic after treatment with a C5 inhibitor for at least three months. Sobi has global co-development and ex-U.S. commercialization rights for systemic pegcetacoplan.

    • Apellis is eligible for a $50.0 million milestone payment from Sobi upon first regulatory and reimbursement approval. Due to the probable achievement of this milestone, and in line with U.S. GAAP, Apellis recorded the full amount as revenue for the fourth quarter of 2021. Apellis continues to expect to achieve this milestone and receive the cash payment in the first half of 2022.

    • Additional global approvals for systemic pegcetacoplan in PNH were received in Saudi Arabia and Australia.

Rare Disease R&D Highlights

  • Immune complex membranoproliferative glomerulonephritis (IC-MPGN) and C3 glomerulopathy (C3G): Apellis expects to initiate a Phase 3 study of systemic pegcetacoplan for IC-MPGN/C3G in the first half of 2022.

  • Amyotrophic lateral sclerosis (ALS): Apellis expects to complete enrollment for its ongoing and potentially registrational Phase 2 MERIDIAN study with systemic pegcetacoplan for ALS in the first half of 2022.

  • Cold agglutinin disease (CAD): Sobi expects to initiate a Phase 3 study of systemic pegcetacoplan for CAD in the first half of 2022.

  • Hematopoietic stem cell transplantation-associated thrombotic microangiopathy (HSCT-TMA): In early 2022, Sobi enrolled the first patient into its Phase 2 trial evaluating the efficacy and safety of systemic pegcetacoplan in patients with HSCT-TMA.

  • EMPAVELI + small interfering RNA (siRNA): Apellis is studying the combination of EMPAVELI and an siRNA, which may offer the potential to reduce the treatment frequency of EMPAVELI. Apellis expects to submit an Investigational New Drug (IND) application in the first half of 2023.

Ophthalmology R&D Highlights

  • Geographic atrophy (GA) secondary to age-related macular degeneration (AMD):

    • In November 2021, following top-line results from the Phase 3 DERBY and OAKS studies evaluating intravitreal pegcetacoplan in GA, Apellis announced formal, written feedback received from the FDA stating that they do not make a distinction between Phases, provided a clinical trial is adequate and well controlled, and that all three studies (FILLY, DERBY, OAKS) appear to be adequate and well controlled.

    • In January 2022, Apellis completed its pre-New Drug Application (NDA) meeting with the FDA and remains on track to submit an NDA for pegcetacoplan for GA in the second quarter of 2022. Apellis plans to include 18-month data from the Phase 3 DERBY and OAKS trials in the NDA submission and expects to announce the results in March 2022.

    • Apellis is beginning its pre-submission discussions with the European Medicines Agency in the first quarter of 2022 and plans to submit a Marketing Authorization Application (MAA) in the second half of 2022.

  • Intermediate AMD (iAMD): Based on feedback from the FDA suggesting that pivotal studies in iAMD would involve a large number of patients over an extended period of time, Apellis is deprioritizing development of the program at this time.

  • APL-2006: Apellis expects to submit an IND for APL-2006, a bispecific C3 and VEGF inhibitor, in the first half of 2023.

Neurology R&D Highlights

  • APL-1030: Apellis expects to submit an IND for APL-1030, a first-in-class, brain-active C3 inhibitor for neurodegenerative diseases, in the second half of 2022.

Fourth Quarter and Full Year 2021 Financial Results:

Cash. As of December 31, 2021, Apellis had $700.6 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. This includes $380.4 million in net proceeds received from the follow-on offering completed in November 2021.

Total Revenue.

  • Total revenue was $60.3 million for the fourth quarter of 2021, which consisted of $9.2 million in recorded net product revenue of EMPAVELI in the U.S. and $51.1 million in revenue associated with the $50.0 milestone and additional licensing and other revenue associated with the Sobi collaboration. In the fourth quarter of 2020, Apellis recorded $250.0 million in licensing revenue in connection to the upfront proceeds from the Sobi transaction completed in October 2020.

  • For the full year 2021, total revenue was $66.6 million, which consisted of $15.1 million in recorded net product sales of EMPAVELI in the U.S. and $51.4 million in revenue associated with the $50.0 milestone and additional licensing and other revenue associated with the Sobi collaboration. This compares to $250.0 million recorded for the full year 2020 in connection with the upfront proceeds from the Sobi transaction.

Research and Development (R&D) Expenses.

  • R&D expenses were $108.2 million for the fourth quarter of 2021, compared to $75.4 million for the same period in 2020. For the full year ended December 31, 2021, R&D expenses were $425.9 million compared to $325.0 million for the full year ended December 31, 2020.

  • The increase in R&D expenses for the full year ended December 31, 2021 was primarily attributable to an increase of $75.0 million attributable to the Beam collaboration, an increase in personnel related costs, clinical trial costs, contra R&D expense related to the Sobi transaction, an increase in other R&D supporting activities, and preclinical study expenses. These increases were offset by lower contract manufacturing expenses in 2021 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.

  • G&A expenses were $41.5 million for the fourth quarter of 2021, compared to $44.5 million for the same period in 2020. For the full year ended December 31, 2021, G&A expenses were $176.8 million compared to $139.4 million for the full year ended December 31, 2020.

  • The increase in G&A expenses for the full year ended December 31, 2021 was primarily attributable to an increase in employee related costs, general commercial preparation activities, and director stock option compensation.

Net Loss (Income). Apellis reported a net loss of $147.9 million and $746.4 million for the fourth quarter and full year 2021, respectively, compared to a net income of $78.3 million and a net loss of $344.9 million for the same periods in 2020.

Conference Call and Webcast

Apellis will host a conference call and webcast to discuss its fourth quarter and full year 2021 financial results and business highlights today, February 28, 2022, at 4:30 p.m. ET. To access the live call by phone, please pre-register for the call here. The conference ID is 8184953. 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. 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.

CONTRAINDICATIONS

  • 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.

EMPAVELI REMS
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.

Infusion-Related Reactions
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.

ADVERSE REACTIONS
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.

Please see full Prescribing Information, including Boxed WARNING regarding serious infections caused by encapsulated bacteria, and Medication Guide.

About Apellis

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.

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 results obtained in preclinical studies and clinical trials will be indicative of results that will be generated in future clinical trials; whether the results of the FILLY, DERBY, and OAKS trials are sufficient to support regulatory submissions; whether a submission for approval of intravitreal pegcetacoplan for GA on the basis of the FILLY, DERBY and OAKS trials will be accepted by the FDA or foreign regulatory agencies; whether intravitreal pegcetacoplan will receive approval from the FDA or equivalent foreign regulatory agencies for GA when expected or at all; 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 CAD, C3G, IC-MPGN, HSCT-TMA, 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’ Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2022 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.

Media Contact:
Lissa Pavluk
media@apellis.com
617.977.6764

Investor Contact:
Meredith Kaya
meredith.kaya@apellis.com
617.599.8178


APELLIS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except per share amounts)

December 31,

2021

2020

Assets

Current assets:

Cash and cash equivalents

$

640,192

$

565,779

Marketable securities

60,358

311,869

Accounts receivable

10,103

Inventory

16,286

Prepaid assets

24,868

11,400

Restricted cash

1,563

1,266

Other current assets

70,677

26,878

Total current assets

824,047

917,192

Non-current assets:

Right-of-use assets

19,901

17,719

Property and equipment, net

6,177

6,803

Other assets

31,640

18,855

Total assets

$

881,765

$

960,569

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$

16,909

$

8,477

Accrued expenses

103,239

111,935

Current portion of development liability

7,584

Current portion of development derivative liability

4,230

Current portion of right of use liabilities

4,115

3,685

Total current liabilities

131,847

128,327

Long-term liabilities:

Long-term development liability

345,151

Convertible senior notes

189,024

358,830

Development derivative liability

253,638

Right-of-use liabilities

17,081

15,217

Total liabilities

683,103

756,012

Commitments and contingencies (Note 16)

Stockholders' equity:

Preferred stock, $0.0001 par value; 10,000 shares authorized and zero shares issued and outstanding at December 31, 2021 and 2020

Common stock, $0.0001 par value; 200,000 shares authorized at December 31, 2021 and 2020; 97,524 and 76,130 shares issued and outstanding at December 31, 2021 and 2020, respectively

10

8

Additional paid-in capital

1,857,430

1,131,013

Accumulated other comprehensive loss

(2,090

)

(117

)

Accumulated deficit

(1,656,688

)

(926,347

)

Total stockholders' equity

198,662

204,557

Total liabilities and stockholders' equity

$

881,765

$

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 December 31,

Year Ended December 31,

2021

2020

2021

2020

Revenue:

Product revenue, net

$

9,210

$

$

15,147

$

Licensing and other revenue

51,080

250,000

51,416

250,646

Total revenue:

60,290

250,000

66,563

250,646

Operating expenses:

Cost of sales

45

200

Research and development

78,180

50,337

345,869

299,921

Cost of research collaboration

25,000

75,000

License expense

5,000

25,050

5,000

25,050

General and administrative

41,462

44,492

176,771

139,401

Operating expenses:

149,686

119,879

602,840

464,372

Net operating income/(loss)

(89,396

)

130,121

(536,277

)

(213,726

)

Loss on conversion of debt

(100,589

)

Loss from remeasurement of development derivative liability

(55,192

)

(40,090

)

(97,675

)

(103,029

)

Interest income

37

194

418

4,164

Interest expense

(3,018

)

(9,610

)

(13,241

)

(29,937

)

Other income/(expense), net

(169

)

(505

)

1,362

(501

)

Net income/(loss) before taxes

(147,738

)

80,110

(746,002

)

(343,029

)

Income tax expense

196

1,845

352

1,845

Net income/(loss)

$

(147,934

)

$

78,265

$

(746,354

)

$

(344,874

)

Other comprehensive income/(loss):

Unrealized gain/(loss) on marketable securities

9

(130

)

9

(8

)

Foreign currency gain/(loss)

71

1,772

(1,982

)

45

Total other comprehensive (loss)/income

80

1,642

(1,973

)

37

Comprehensive income/(loss), net of tax

$

(147,854

)

$

79,907

$

(748,327

)

$

(344,837

)

Net income/(loss) per common share, basic

$

(1.61

)

$

1.03

$

(8.84

)

$

(4.59

)

Net income/(loss) per common share, diluted

$

(1.61

)

$

0.93

$

(8.84

)

$

(4.59

)

Weighted-average number of common shares used in net income/(loss) per common share, basic

92,149

75,875

84,421

75,163

Weighted-average number of common shares used in net income/(loss) per common share, diluted

92,149

94,321

84,421

75,163