Apellis Pharmaceuticals, Inc. Q4 FY2024 earnings call

• Cyphovri Market Position: Cyphovri is the market-leading treatment for geographic atrophy in the US, with over 510,000 injections administered. It aims to secure market leadership and grow the GA market, with international expansion efforts including approval in Australia and ongoing review in Switzerland, and development of next-generation treatments.
• Empaveli in Rare Diseases: Empaveli is elevating the standard of care in PNH and is set to expand into C3G and primary ICG PGN. A supplemental NDA was filed based on positive Phase 3 VALION data, with plans to launch in the second half of 2025. Phase 3 trials in new nephrology indications like FSGS and late graft function are planned.
• Pipeline Advancements: The company is advancing a gene editing approach with Beam Therapeutics and developing a next-generation GA treatment combining Cyphovri and APL 3000-07, with a Phase 2 trial scheduled for Q2 2025.

In the fourth quarter of 2024, Cyphovri contributed $168 million in US net product revenue, and Empaveli contributed $23 million. For the full year 2024, total revenue was $781 million, a nearly 100% increase from 2023. Cyphovri had over 510,000 injections administered in the US by December and generated nearly $900 million in sales in less than two years. Cyphovri was the major contributor, representing a significant portion of the total revenue.

The company anticipates operating expenses in 2025 to be relatively stable compared to 2024. Existing cash and future product sales are expected to fund the core business to profitability. The GA market is in early growth stages, with plans to grow the market and secure leadership. Empaveli is expected to launch in the second half of 2025 in C3G and ICG PGN, with Phase 3 trials in new nephrology indications in the second half of 2025.

• Regulatory uncertainties, including timing and outcome of regulatory reviews for products like Empaveli in international markets. - Market competition in the GA space, though Cyphovri is in a strong position. - Temporary factors affecting Q1 2025 revenue, such as Medicare reverifications, winter storms, and sample usage due to funding gaps in patient assistance organizations.

Q: On emphysema and the kidney indications, regarding the primary endpoint and competitor's 24-hour endpoint, do you plan to present publicly and which metric the FDA is focused on?

A: We're excited about the submission with Empaveli. The 24-hour was consistent with spot test results, but the spot endpoint was key. Important metrics include proteinuria reduction, eGFR stabilization, and histopathology with C3 deposits clearing.

Q: How should we think about Q1 results relative to Q4 for Cyphovri, and impact of Medicare Advantage beneficial status on new patient share?

A: Q1 may be lower than Q4 due to temporary factors, but injections grew in Q1 vs Q4. Beneficial status impact on new patient share is gradual, with injections growing and expected 2025 growth.

Q: Importance of Cyphovri label saying monthly injection vs every other month?

A: Efficacy and convenience are key. Cyphovri has robust data with every other month dosing, not demonstrated by competitor. FDA didn't approve competitor for every other month dosing, and Cyphovri's label includes flexible dosing.

Q: Color on cadence of Cyphovri launch in 2025 and impact of competitor's label change?

A: Injections continue to grow. Competitor's label change level-sets knowledge, and Cyphovri's efficacy and flexible dosing give an enviable position. 2025 expected to have growth despite temporary Q1 impacts.

Q: Strategy for combo trial with APL 3000-07 and Cyphovri, phasing and trial design?

A: The combo involves subcutaneous and intravitreal injections synchronized to every two or three months in physician offices. Phase 2 trial will explore dosing components, with a single arm study initially.

Q: European vs US regulatory review for Empaveli in C3G and ICMPGN?

A: Partner Sobi and Apellis are in lockstep. US has ~5,000 patients, with unique opportunity and few competitors. European regulatory progress is in line with US efforts.

Q: Dynamics of sampling and funding gap for patient assistance organizations?

A: Sampling increase is due to funding gaps in patient assistance organizations. It's a temporary issue, with physicians using samples to treat patients, and expected to be resolved over time.

Q: Competitive dynamics and new patient share for Cyphovri?

A: Direction is positive, with differentiation on efficacy and longitudinal data gaining recognition. New patient share trend is positive, with physicians recognizing Cyphovri's long-term efficacy and every other month dosing benefits.

Q: Expectations for Empaveli launch in C3G and ICMPGN, urgency of patient treatment?

A: High urgency for patients with C3G and ICMPGN, as half of patients with C3G can lose kidneys in ten years. Demand is high, with expected early launch trajectory and limited competition.

Q: OpEx growth in 2025 and gross margin trends?

A: OpEx expected to be relatively stable compared to 2024. Gross margin has no visibility due to sampling and other factors, but existing cash and product sales are expected to fund the business to profitability.