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Apellis Pharmaceuticals Reports Fourth Quarter and Full Year 2019 Financial Results

  • Positive Top-line Results Announced from Head-to-Head Phase 3 PEGASUS Trial of Pegcetacoplan (APL-2) Compared to Eculizumab in Patients with Paroxysmal Nocturnal Hemoglobinuria (PNH)
  • Completion of Enrollment in Phase 3 PRINCE Trial in Treatment-Naïve PNH Patients Expected in First Half of 2020
  • Full Enrollment of Two Phase 3 Trials in Geographic Atrophy Expected in First Half of 2020
  • Cash Position of $352.0 Million as of December 31, 2019. Follow-on Offering in January Raised Additional Gross Proceeds of $404.2 Million; $20.0 Million Milestone Payment also Received in January from SFJ Pharmaceuticals

WALTHAM, Mass., Feb. 27, 2020 (GLOBE NEWSWIRE) -- Apellis Pharmaceuticals, Inc. (APLS), a global biopharmaceutical company pioneering targeted C3 therapies, today announced its fourth quarter and full year 2019 financial results and business highlights.

“We are thrilled with the progress we made over the past year to advance our pipeline and validate our unique C3-targeted approach. In January, we announced top-line results from the Phase 3 PEGASUS trial, which met its primary endpoint and demonstrated that pegcetacoplan was superior to eculizumab with a statistically significant improvement in hemoglobin levels. We believe that pegcetacoplan has the potential to elevate the standard of care for people with PNH, and these results also strengthened our confidence in the platform potential of pegcetacoplan to treat a wide array of serious, complement-driven diseases,” said Cedric Francois, M.D., Ph.D., co-founder and chief executive officer of Apellis.

“We plan to build on this momentum in 2020 by completing enrollment in three separate Phase 3 trials of pegcetacoplan including two in geographic atrophy, a leading cause of blindness that affects approximately five million people worldwide and has no approved treatments. We also plan to meet with regulators in the US and EU in the first half of this year to discuss next steps for regulatory submissions of pegcetacoplan in PNH,” Dr. Francois added. “We are committed to delivering life-changing therapies for people with serious diseases, and 2020 will be focused on executing to make this a reality.”

Business Highlights and Upcoming Milestones:

Subcutaneous Pegcetacoplan (APL-2)

  • In January 2020, Apellis announced positive results from the Phase 3 head-to-head PEGASUS study evaluating pegcetacoplan compared to eculizumab in 80 adults with PNH. Top-line data showed that pegcetacoplan met the study’s primary efficacy endpoint, demonstrating superiority to eculizumab with a statistically significant improvement in adjusted means of 3.8 g/dL of hemoglobin at week 16 (p<0.0001). The safety profile of pegcetacoplan was comparable to eculizumab in the study. Apellis plans to present detailed 16-week results from the study at a future scientific meeting, and the company also expects to report 48-week top-line results from the trial in the second half of 2020.  
  • Apellis expects to complete enrollment in the Phase 3 PRINCE trial evaluating pegcetacoplan in treatment-naïve PNH patients in the first half of 2020 and announce top-line data from the study in early 2021.
  • Apellis plans to disclose plans and timing for further clinical development of pegcetacoplan for patients with cold agglutinin disease (CAD) in the first half of 2020. In June 2019, positive interim data for pegcetacoplan in patients with CAD were presented from the Phase 2 PLAUDIT trial at the 24th Annual Congress of the European Hematology Association (EHA).
  • In November 2019, Apellis announced positive preliminary results in the C3 glomerulopathy (C3G) cohort of the Phase 2 DISCOVERY study. The results, which showed a reduction in mean proteinuria of nearly 50% at study day 84, were presented at the American Society of Nephrology (ASN) Kidney Week 2019 in Washington D.C. The company expects to disclose plans and timing for further clinical development of pegcetacoplan for patients with C3G in the first half of 2020.

Intravitreal Pegcetacoplan

  • Apellis expects that its two Phase 3 trials for pegcetacoplan in patients with geographic atrophy (GA), DERBY and OAKS, will be fully enrolled in the first half of 2020 and that the company will announce top-line results from these trials in mid-2021.

Intravenous C3 Inhibition

  • Apellis is developing compounds targeting C3 for intravenous administration. In particular, Apellis continues to develop APL-9 for the prevention of complement immune system activation coincident with adeno-associated virus vector administration for gene therapies.

Corporate & Other Highlights

  • In January 2020, Apellis announced the closing of its public offering of 10,925,000 shares of common stock at the public offering price of $37.00 per share, including 1,425,000 shares issued upon the exercise in full by the underwriters of their option to purchase additional shares. The gross proceeds from the offering, before deducting underwriting discounts, commissions, and expenses were approximately $404.2 million.
  • In September 2019, Apellis announced the closing of its offering of 3.500% convertible senior notes due 2026. The notes are convertible into shares of Apellis common stock at an initial conversion rate of 25.3405 shares per $1,000 principal amount of notes. Upon conversion of the notes, Apellis may pay or deliver, as the case may be, cash, shares of common stock, or a combination of cash and shares of common stock, at Apellis’ election. The gross proceeds from this offering, before discounts, commissions, and expenses were approximately $220 million.
  • In March 2019, Apellis announced the closing of its public offering of 6,900,000 shares of common stock, at a public offering price of $17.00 per share, including 900,000 shares issued upon the exercise in full by the underwriters of their option to purchase additional shares. The gross proceeds from the offering, before deducting underwriting discounts and commissions and expenses payable by Apellis, were approximately $117.3 million.
  • In February 2019, Apellis announced a collaboration with SFJ Pharmaceuticals® to support the development of pegcetacoplan in hematologic indications. Under the agreement, Apellis has received $140.0 million in upfront and near-term milestone payments, including the last $20.0 million in January 2020.

Fourth Quarter and Full Year 2019 Financial Results:

As of December 31, 2019, Apellis had $352.0 million in cash and cash equivalents, compared to $176.3 million as of December 31, 2018. In addition, in January 2020, the company raised approximately $381.4 million in net proceeds in a public offering and received the final $20.0 million milestone payment from SFJ Pharmaceuticals.  

Apellis reported a net loss of $113.2 million for the fourth quarter of 2019, compared to a net loss of $36.5 million for the fourth quarter of 2018. For the full year ending December 31, 2019, Apellis reported a net loss of $304.7 million, compared to a net loss of $127.5 million for the full year ending December 31, 2018.

Research and development expenses were $78.5 million in the fourth quarter of 2019, compared to $30.8 million for the same period in 2018. For the full year ending December 31, 2019, research and development expenses were $221.0 million, compared to $105.3 million for the full year ending December 31, 2018. The increase in R&D expenses for full year 2019 was primarily attributable to an increase of $41.1 million in clinical trial costs associated with the preparation for and commencement of our Phase 3 clinical trials, an increase of $43.8 million in manufacturing expenses in connection with the supply of pegcetacoplan for our Phase 3 clinical trials, an increase of $23.5 million in compensation and related personnel costs primarily due to the hiring of additional personnel in 2019, an increase of $6.5 million related to preclinical study expenses, and an increase of $2.2 million in research and development supporting activities and offset by a decrease of $1.4 million in device development expenses. We expect our research and development expenses to continue to increase as the number of patients in our trials increases and the number of ongoing trials increases.

General and administrative expenses were $27.5 million in the fourth quarter of 2019, compared to $6.4 million for the same period in 2018. For the full year ending December 31, 2019, general and administrative expenses were $67.0 million, compared to $22.6 million for the full year ending December 31, 2018. The increase in general and administrative expenses for full year 2019 was primarily attributable to an increase in employee-related costs of $21.0 million due to the hiring of additional personnel, an increase in professional and consulting fees of $20.2 million, an increase in office, travel and related costs of $2.1 million, an increase of $1.5 million in information technology expenses, and an increase in insurance costs of $0.6 million. These increases were offset by a decrease in license agreement costs of $1.0 million from the payment of certain milestones met in 2018. The increased employee-related costs of $21.0 million consisted of $12.7 million related to an increase in salaries and benefits primarily due to the hiring of additional members of our management team, $6.3 million related to stock option expense associated with the grants of stock options to employees and $2.0 million in recruitment expense. The increased professional and consulting fees of $20.2 million primarily consisted of an increase in consulting fees of $16.7 million, an increase of $2.0 million in legal fees, an increase in communication and public relations fees of $0.9 million, an increase of $0.5 million in accounting fees, and an increase of $0.1 million in public company costs.

About Pegcetacoplan (APL-2)
Pegcetacoplan is an investigational, targeted C3 inhibitor designed to regulate excessive 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 paroxysmal nocturnal hemoglobinuria (PNH), geographic atrophy (GA), and C3 glomerulopathy (C3G). Pegcetacoplan was granted Fast Track designation by the U.S. Food and Drug Administration (FDA) for the treatment of PNH and the treatment of GA. For additional information regarding our clinical trials, visit www.apellis.com/clinical-trials.html.

About APL-9
APL-9 is an investigational, targeted C3 inhibitor that 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 whereas pegcetacoplan is designed for chronic subcutaneous or intravitreal administration.

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. By pioneering 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, and nephrology. For more information, please visit http://apellis.com.

Forward-Looking Statements  
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 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 27, 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.

Investor Contact:
Sam Martin / Maghan Meyers
Argot Partners
sam@argotpartners.com / maghan@argotpartners.com
212.600.1902

Media Contact:
Tracy Vineis
media@apellis.com
617.420.4839

APELLIS PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
     
    December 31,
    2018   2019
             
Assets            
Current assets:            
Cash and cash equivalents   $   176,267,666     $   351,985,085  
Prepaid assets     24,333,851       19,802,008  
Other current assets     1,837,704       1,307,591  
Total current assets     202,439,221       373,094,684  
Non-current Assets:            
Right-of-use assets     —       14,110,209  
Property and equipment, net     977,918       1,654,999  
Other assets      116,420       385,088  
Total assets    $   203,533,559     $   389,244,980  
Liabilities and Stockholders' Equity            
Current liabilities:            
Accounts payable   $   10,254,938     $   8,360,527  
Accrued expenses     5,103,002       54,782,951  
Current portion of long-term-debt     1,666,667       -   
Current portion of operating lease liabilities           2,609,341  
Total current liabilities     17,024,607       65,752,819  
Long-term liabilities:            
Convertible Senior Notes     —       142,566,851  
Development derivative liability     —       134,839,000  
Term loan facility     18,722,321       -   
Promissory note      6,655,193       -   
Operating lease liabilities     —       11,856,634  
Other liabilities     158,783       -   
Total liabilities     42,560,904       355,015,304  
Stockholders' equity:            
Preferred stock, $0.0001 par value; 10,000,000 shares authorized and
  zero shares issued and outstanding at December 31, 2018 and 2019
    —       —  
Common stock, $0.0001 par value; 200,000,000 shares authorized and
  at December 31, 2018 and 2019; 56,279,307 and 63,938,003 shares issued
  and outstanding at December 31,  2018 and 2019, respectively.
    5,628       6,393  
Additional Paid-in capital     437,855,681       615,849,518  
Accumulated other comprehensive loss     (122,807 )     (153,775 )
Accumulated deficit     (276,765,847 )     (581,472,460 )
Total stockholders' equity     160,972,655       34,229,676  
Total liabilities and stockholders' equity    $   203,533,559     $   389,244,980  
             


APELLIS PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
 
  Three Months Ended December 31,   Year Ended Deccember 31,
  2018   2019   2018   2019
Operating expenses:                      
Research and development $   30,805,611     $   78,471,427     $   105,285,576     $   220,968,770  
General and administrative   6,390,981       27,468,856       22,639,184       67,046,483  
Operating loss    (37,196,592 )     (105,940,283 )     (127,924,760 )     (288,015,253 )
Loss on extinguishment of debt   —       —       —       (1,501,215 )
Loss from remeasurement of development derivative liability   —       (4,736,000 )     —       (14,839,000 )
Interest expense   (624,365 )     (3,930,232 )     (2,512,956 )     (5,284,610 )
Interest income    873,355       1,478,465       2,960,771       5,108,779  
Other income (expense), net   488,127       (89,373 )     (25,249 )     (175,314 )
Net loss  $   (36,459,475 )   $   (113,217,423 )     (127,502,194 )     (304,706,613 )
Other comprehensive gain (loss):                      
Foreign currency gain (loss)    (462,748 )     51,474       (122,807 )     (30,968 )
Total other comprehensive gain (loss)   (462,748 )     51,474       (122,807 )     (30,968 )
Comprehensive loss, net of tax $   (36,922,223 )   $   (113,165,949 )   $   (127,625,001 )   $   (304,737,581 )
Net loss per common share, basic and diluted  $   (0.65 )   $   (1.77 )   $   (2.34 )   $   (4.90 )
Weighted-average number of common shares used in net
  loss per common share, basic and diluted
  56,201,299       63,901,355       54,396,483       62,228,601