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.

No win no fee: SFJ's risk-sharing development model
SFJ payments to Apellis   
On signing in Feb 2019 $60m
Clinical milestone payments  $80m
Total received as of March 2021 $140m
Apellis to SFJ   
FDA approval* $226m
EMA approval* $226m
Total due to SFJ $452m
*Incl $5m initial payment then six annual payments with the majority made from 3rd to 6th anniversary of approval. Source: Apellis SEC filing.


Chasing Soliris: the crowded late-stage PNH pipeline
Project Description Company  Note
Empaveli (pegcetacoplan) Subcutaneous C3 inhibitor Apellis  FDA approved 
Iptacopan Oral factor B inhibitor Novartis  Two pivotal trials under way in treatment-experienced and naive; results due from 2022
Danicopan (ALXN2040) Oral factor D inhibitor Alexion/ Astrazeneca Phase 3 under way as add-on to Soliris; results due late 2022
Crovalimab Subcutaneous C5 inhibitor Roche  Three pivotal trials listed in treatment-experiencednaive and H2H vs Soliris; results due late 2022/23
BCX9930 Oral factor D inhibitor Biocryst Phase 3 trial due to start H2 2021
And don't forget the Soliris biosimilars… 
ABP 959 Intravenous C5 inhibitor Amgen Phase 3 under way
BCD-148 Intravenous C5 inhibitor Biocad Phase 3 under way
SB12 Intravenous C5 inhibitor Samsung Bioepis Phase 3 under way
Source: Evaluate Pharma & clinicaltrials.gov.

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