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CST: 03/04/2020 21:06:47   

Apellis Pharmaceuticals Reports First Quarter 2019 Business Update and Financial Results

331 Days ago

Resumed Dosing in Phase 3 Geographic Atrophy Program

Announced Innovative Collaboration & Financing with SFJ Pharmaceuticals®

Cash Position of $288.2 Million at Quarter-End

WALTHAM Mass. and CRESTWOOD, Ky., May 08, 2019 (GLOBE NEWSWIRE) -- Apellis Pharmaceuticals Inc., (Nasdaq:APLS) a clinical-stage biopharmaceutical company focused on the development of novel therapeutic compounds to treat disease through the inhibition of the complement system, today announced its first quarter 2019 financial results and business highlights.

“Apellis made considerable clinical and corporate progress during the first quarter. We resumed dosing in our Geographic Atrophy (GA) program while maintaining our original enrollment timeline guidance, strengthened our capital position and continued enrollment in the Phase 3 PEGASUS trial in patients with Paroxysmal Nocturnal Hemoglobinuria (PNH), which we expect to fully enroll by the end of the second quarter of 2019,” said Cedric Francois, CEO and co-founder of Apellis. “The innovative collaboration with SFJ Pharmaceuticals provides Apellis with validation and substantial non-dilutive funding to develop APL-2 in hematologic diseases of complement with serious unmet need, which, along with the equity offering completed in March, solidified our capital position. The more we study APL-2, the more we understand what the unique mode of action of C3 inhibition can provide to these patients – the potential for increased survival, broad hematologic correction and clear quality of life improvement.”

Business Highlights and Upcoming Milestones:

APL-2 in GA

  • In March 2019, Apellis announced that, with the agreement of the independent safety monitoring committee, it resumed dosing in its two Phase 3 trials for APL-2 in patients with GA (DERBY & OAKS). This followed an in-depth investigation into the cause of non-infectious inflammation in patients treated from a single manufacturing lot of APL-2 intravitreal investigational material, as well as modifications to the manufacturing process in order to eliminate an impurity in the active pharmaceutical ingredient (API) suspected of being the source of the non-infectious inflammation. Following the modifications, no inflammation was observed in ten low-vision patients dosed in a Phase 1b trial with new intravitreal APL-2 drug product. Apellis believes that it has sufficient supply of APL-2 manufactured using the modified process to conduct the entire Phase 3 GA program. The Company continues to expect to have both trials fully enrolled by the end of the first quarter of 2020.

APL-2 in Hematologic Diseases

  • In February 2019, Apellis announced a novel, risk-sharing collaboration to support the development of APL-2 in hematologic indications with SFJ Pharmaceuticals, a global drug development company backed by Blackstone Life Sciences and Abingworth. Under the terms of the agreement, Apellis received a $60 million upfront payment and up to an additional $60 million payable based on Apellis meeting specific, pre-defined clinical milestones that are expected in 2019 and associated with the PNH development program, and subject to Apellis meeting certain capital requirements, with the potential for additional payments subject to mutual agreement, while retaining exclusive worldwide rights to APL-2 in all indications.
  • In February 2019, Apellis announced that the U.S. Food and Drug Administration (FDA) granted Fast Track designation to APL-2, for the treatment of all patients with PNH, superseding the prior Fast Track designation granted in December, 2016 for APL-2 for the subset of PNH patients who continue to experience hemolysis requiring blood transfusions despite receiving therapy with eculizumab.
  • In February 2019, Apellis announced that the FDA granted orphan drug designation to APL-2, for the treatment of autoimmune hemolytic anemia (AIHA), which includes both cold agglutinin disease (CAD) and warm autoimmune hemolytic anemia (wAIHA).
  • Initial clinical testing indicates that the pharmacokinetic (PK) profile of APL-2 administered subcutaneously, 2x weekly at a dose of 1,080 mg, both with the 510k approved pump used in the PEGASUS Phase 3 trial and with the Enable enFuse™ device, is comparable to that of APL-2 administered 1x daily at a dose between 270 mg and 360 mg. Based on the data generated to date, the Company believes that the tolerability profiles are comparable.
  • Apellis continues to expect that the Phase 3 PEGASUS trial assessing the safety and efficacy of APL-2 in patients with PNH compared to eculizumab will be fully enrolled by the end of the second quarter of 2019. Top-line data from the PEGASUS trial is expected in the fourth quarter of 2019.

Corporate Highlights

  • In March 2019, Apellis completed a public offering of 6.9 million shares of common stock, which included 900,000 shares issued upon the exercise in full by the underwriters of their option to purchase additional shares at the public offering price, at a public offering price of $17.00 per share, raising net proceeds of $109.6 million, after deducting underwriting discounts, commissions and offering expenses.
  • Expanded the leadership team and continued to build the commercial team. During the quarter, Federico Grossi was appointed to the position of Chief Medical Officer, Lukas Scheibler was appointed to the position of Chief Innovation Officer and Ahmad Sadr was appointed to the position of SVP of Technical Operations.            

First Quarter 2019 Financial Results:

As of March 31, 2019, Apellis had $288.2 million in cash and cash equivalents, compared to $176.3 million as of December 31, 2018. This includes $109.6 million in net proceeds raised in the public offering of common stock in March 2019 and a $60.0 million upfront payment received through the collaboration with SFJ Pharmaceuticals.

Apellis reported a net loss of $50.6 million for the first quarter of 2019, compared to a net loss of $21.7 million for the first quarter of 2018.

Research and development expenses were $40.5 million in the first quarter of 2019, compared to $17.4 million for the same period in 2018. The increase was primarily attributable to an increase of $9.7 million in clinical trial costs, an increase of $8.1 million in manufacturing expenses, an increase of $3.9 million in employee related costs primarily due to the hiring of additional personnel, an increase of $0.7 million related to research and development supporting activities, and an increase of $0.7 million in pre-clinical study expenses, partially offset by a decrease of $0.1 million in device development expenses.

General and administrative expenses were $8.1 million in the first quarter of 2019, compared to $4.0 million for the same period in 2018. The increase was primarily attributable to an increase in employee related costs of $2.8 million due to the hiring of additional personnel, an increase in professional and consulting fees of $0.9 million, an increase in general office costs of $0.3 million and an increase of $0.1 million in insurance costs.

About APL-2
APL-2, an investigational drug, is designed to inhibit the complement cascade centrally at C3 and may have the potential to treat a wide range of complement-mediated diseases more effectively than is possible with partial inhibitors of complement. APL-2 is a synthetic cyclic peptide conjugated to a polyethylene glycol (PEG) polymer that binds specifically to C3 and C3b, effectively blocking all three pathways of complement activation (classical, lectin, and alternative). Apellis is currently evaluating APL-2 in clinical studies in patients with geographic atrophy, in patients with PNH who are being treated with eculizumab or who are naïve to complement inhibitor treatment, in patients with autoimmune hemolytic anemia and in patients with C3G and other glomerular diseases.

About the DERBY and OAKS Trials
The DERBY and OAKS trials are 600-patient prospective, international, multicenter, randomized, double-masked, sham-injection controlled Phase 3 studies assessing the efficacy and safety of multiple intravitreal (IVT) injections of APL-2 in patients with geographic atrophy secondary to age-related macular degeneration (AMD). For more information, please visit https://gastudy.com/.

About APL-2 in Hematologic Diseases 
Apellis is currently evaluating APL-2 in PEGASUS, a Phase 3 trial to evaluate the efficacy and safety of APL-2 in patients with PNH as well as in two Phase 1b trials (PHAROAH and PADDOCK) for systemic administration. Previously reported interim data from these Phase 1b trials showed improvements in lactate dehydrogenase and hemoglobin levels in patients who are suboptimal responders to eculizumab and untreated patients, respectively. Apellis is also testing APL-2 in a Phase 2 open-label trial assessing the safety, tolerability, efficacy, and PK of multiple subcutaneous (SC) doses of APL-2 administered daily in patients with warm autoimmune hemolytic anemia (wAIHA) or cold agglutinin disease (CAD). In this trial to date, patients treated with APL-2 have experienced improvements in hemoglobin, reticulocytes, bilirubin and lactate dehydrogenase. For additional information regarding our clinical trials, visit www.apellis.com/clinical-trials.html.

About Apellis
Apellis Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company focused on the development of novel therapeutic compounds for the treatment of a broad range of life-threatening or debilitating autoimmune diseases based upon complement immunotherapy through the inhibition of the complement system at the level of C3. Apellis is the first company to advance chronic therapy with a C3 inhibitor into clinical trials. For additional information about Apellis and APL-2, please visit http://www.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 APL-2 will successfully advance through the clinical trial process on a timely basis, or at all; whether the results of such clinical trials will warrant regulatory submissions and whether APL-2 will receive approval from the FDA or equivalent foreign regulatory agencies for GA, PNH, CAD, wAIHA or any other indication; 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 May 7, 2019 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.

  Three Months Ended March 31,  
    2018       2019    
Operating expenses:        
Research and development $   17,402,890     $   40,479,899    
General and administrative     4,035,255         8,170,671    
Operating loss      (21,438,145 )       (48,650,570 )  
Loss on extinguishment of debt     —         (1,208,132 )  
Loss on remeasurement of development derivative liability     —         (736,000 )  
Interest expense     (667,087 )       (593,505 )  
Interest income      400,401         867,017    
Other income (expense), net     (31,473 )       (253,177 )  
Net loss      (21,736,304 )       (50,574,367 )  
Other comprehensive income (loss):        
  Foreign currency gain     —         2,162    
Total other comprehensive loss     —         2,162    
Comprehensive loss, net of tax $   (21,736,304 )   $   (50,572,205 )  
Net loss per common share, basic and diluted  $   (0.43 )   $   (0.87 )  
Weighted-average number of common shares used in net
  loss per common share, basic and diluted
    50,353,812         57,897,390    

    December 31,   March 31,  
      2018       2019    
Assets       (Unaudited)  
Current assets:          
Cash and cash equivalents   $   176,267,666     $   288,246,706    
Refundable research and development credit       1,473,591         1,755,639    
Prepaid assets       24,333,851         20,509,948    
Other current assets       364,113         15,570    
Total current assets       202,439,221         310,527,863    
Non-current Assets:          
Right-of-use Assets       —         6,621,807    
Property and equipment, net       977,918         1,041,063    
Other assets        116,421         162,345    
Total assets    $   203,533,559     $   318,353,078    
Liabilities and Stockholders' Equity          
Current liabilities:          
Accounts payable   $   10,254,938     $   11,916,152    
Accrued expenses       5,103,002         7,342,601    
Current portion of long-term debt       1,666,667         -     
Current portion of right of use liabilities       —         1,127,720    
Total current liabilities       17,024,607         20,386,473    
Long-term liabilities:          
Development derivative liability       —         60,736,000    
Term loan facility       18,722,321         —    
Promissory note        6,655,193         6,673,970    
Right-of-use liabilities       —         5,566,811    
Other liabilities       158,783         234,932    
Total liabilities       42,560,904         93,598,186    
Stockholders' equity:          
Preferred stock, $0.0001 par value; 10,000,000 shares authorized, and zero 
  shares issued and outstanding at December 31, 2018 and March 31, 2019
      —         —    
Common stock, $0.0001 par value; 200,000,000 shares authorized
  at December 31, 2018 and March 31, 2019 and 56,279,307 shares
  issued and outstanding at December 31, 2018 and 63,218,476 shares
  issued and outstanding at March 31, 2019
      5,628         6,322    
Additional paid in capital       437,855,681         552,209,429    
Accumulated other comprehensive loss       (122,807 )       (120,645 )  
Accumulated deficit       (276,765,847 )       (327,340,214 )  
Total stockholders' equity       160,972,655         224,754,892    
Total liabilities and stockholders' equity    $   203,533,559     $   318,353,078    
Media Contact:
Liza Sullivan
617.482.0042  (office)
917.981.7494  (mobile)

Investor Contact:
Alex Kane
212.301.7218  (office)
929.400.2691  (mobile)

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