Apellis Pharmaceuticals, Inc. Q1 FY2025 earnings call

Management Statement and Operational Highlights

• SYFOVRE Efforts: Driving demand in the GA market through initiatives like a DTC campaign with increased website traffic, a 'Find a Doctor' tool, educating optometrists and ophthalmologists, and launching education programs on patient reimbursement to mitigate co-pay issues.
• EMPAVELI Launch Prep: Commercial and medical teams ramping up for potential label expansion, with prelaunch activities and disease state awareness efforts. Approach includes highlighting urgency of treatment, ensuring access, and establishing market leadership.
• Financials: Operating expenses expected to remain in line with 2024. Closely monitoring tariff impact and confident in cash position to fund business to profitability, with the launch of C3G expected to meaningfully contribute to top line.

Segment Performance

• SYFOVRE: Net product revenue was $130 million in Q1. Injection demand grew 4% quarter-over-quarter, but revenue was below expectations due to two factors: a drawdown of channel inventory (including in physician offices) in Q1 and funding shortages at third-party co-pay assistance programs leading to increased sample usage. SYFOVRE maintains over 60% of the overall market for geographic atrophy, with new patient starts exceeding 50% in Q1 and reaching 55% by late April.
• EMPAVELI: Net product revenue in PNH was $20 million in Q1. The FDA granted Priority Review for C3G and IC-MPGN with a PDUFA date of July 28. Phase 3 VALIANT results demonstrated significant proteinuria reduction, eGFR stabilization, and C3c staining clearing. Apellis is on track to initiate pivotal studies in focal segmental glomerulosclerosis and delayed graft function in the second half of 2025.

Guidance

• SYFOVRE revenue impacted by inventory and co-pay issues, but injection demand growth is positive.
• EMPAVELI on track for launch in C3G and IC-MPGN by late 2025, with pivotal studies in other nephrology indications in H2 2025.
• No immediate sales guidance for SYFOVRE, but expecting C3G launch to meaningfully contribute to top line.

Risks

• Uncertainty around co-pay assistance program funding, affecting commercial dose demand and sample usage.
• Tariff risks and their potential adverse impact on business.
• Market adoption challenges for new indications and therapies, which may impact revenue growth.

Q: Jon Miller asked about 1Q volume dynamics and inventory changes.

A: Cedric Francois and Tim Sullivan discussed inventory build in Q4, drawdown in Q1, and impact of co-pay issues on samples and commercial doses.

Q: Tazeen Ahmad inquired about new patient share calculation and sales guidance for SYFOVRE.

A: David Acheson spoke about data sets and sales guidance plans, with no immediate guidance expected.

Q: Anupam Rama asked about payer landscape post Izervay label update.

A: David Acheson mentioned preferred positioning of SYFOVRE on large Medicare Advantage plans.

Q: Unidentified Analyst asked about APL-3007 combination study.

A: Cedric Francois discussed expected benefit of combining SYFOVRE with APL-3007.

Q: Steve Seedhouse asked about dialogue with industry members regarding co-pay assistance.

A: Cedric Francois stated Apellis respects independence of co-funding organizations.

Q: Colleen Kusy asked about risk of co-pay assistance program not returning.

A: David Acheson said it's unpredictable and Apellis operates under assumption it won't return.

Q: Unidentified Analyst asked about tariff exposure and manufacturing location.

A: Tim Sullivan said they're analyzing tariffs but couldn't provide detailed info on manufacturing and IP.

Q: Eliana Merle asked about net price per vial and 2Q demand.

A: Cedric Francois explained revenue recognition vs. vials shipped, and David Acheson discussed 2Q demand growth.

Q: Annabel Samimy asked about inventory build related to Izervay CRL.

A: Cedric Francois and David Acheson discussed impact of CRL on SYFOVRE demand and market share.

Q: Biren Amin asked about samples increase and future trends.

A: Cedric Francois and David Acheson spoke about samples as true demand and efforts to transition to commercial doses.

Q: Yigal Nochomovitz asked about co-pay situation resolution and EMPAVELI launch plans.

A: David Acheson discussed co-pay uncertainty and EMPAVELI prelaunch activities.

Q: Douglas Tsao asked about benefit design and SYFOVRE advantage.

A: David Acheson explained Apellis Assist and education programs for patient reimbursement.

Q: Lachlan Hanbury-Brown asked about market growth efforts.

A: David Acheson spoke about DTC campaigns and market education initiatives.

Q: Ryan Deschner asked about inventory impact on future quarters and DTC campaign impact.

A: Cedric Francois and David Acheson discussed inventory stability and positive DTC campaign results.

Q: Judah Frommer asked about sampling dynamics and competition.

A: David Acheson talked about sampling for physician use and focus on new practices.

Q: Greg Harrison asked about EMPAVELI revenue decline and future dynamics.

A: Cedric Francois and Tim Sullivan discussed PNH stability and EMPAVELI launch potential.

Q: Unidentified Analyst asked about cash runway and profitability.

A: Tim Sullivan stated cash runway guidance remains unchanged.

Q: Graig Suvannavejh asked about SYFOVRE growth outlook.

A: Cedric Francois and Caroline Baumal discussed steady growth and AI tools for acceleration.

Q: Lisa Walter asked about C3 siRNA in kidney indications and SYFOVRE ex-U.S. plans.

A: Cedric Francois discussed kidney indication focus and ex-U.S. launch progress in Australia and other regions.