Apellis crosses the finish line – now to pay it back

A broader than expected label for Apellis’s pegcetacoplan – now branded Empaveli – gave the company’s stock a 20% bump this morning; the FDA granted approval in paroxysmal nocturnal haemoglobinuria, for treatment-naïve patients and those switching from Astrazeneca/Alexion’s blockbuster franchise Soliris/Ultomiris, the only options currently available for PNH. Solo launches are a nervous time for small companies, so anything to help Apellis hit the ground running in a fiercely contested market is good news. That competition will only increase if oral projects succeed; Empaveli is given subcutaneously twice a week. It is also worth remembering that, on top of $386m in convertible debt, Apellis owes $452m to SFJ Pharmaceuticals, assuming European approval follows later this year. SFJ’s novel funding model means that it is only repaid if regulatory approval is won, but this comes at a price: Apellis calculates the implied cost of borrowing at almost 12%. These sort of deals are pitched as non-dilutive, but equity investors could well be asked to help pay them back; and the sellside's expectations for Empaveli feel relatively modest at $273m in 2026, according to Evaluate Pharma. With Apellis stock close to a record high, that equity call might come sooner rather than later, in case launch jitters set in.