Apellis Pharmaceuticals Inc Q3 2024 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Jon Miller - Evercore ISI Institutional Equities - Analyst : Hi, guys. Thanks so much for taking the question. I would love to spend my one question talking about the evolution of market share in 3Q and beyond. Obviously, we all heard your competitor talking about increased market share in 3Q and their expectations for, well, in their mind, continuing dominance from here. So what are the pushes and pulls of you versus them on who's going to end up with the dominant market share? And to what extent do you think that the actions you're taking to drive patients into the retina physician practice out of those ophthalmology offices, to what extent are those going to deliver patients to you as opposed to the competitor?

Question: Jon Miller - Evercore ISI Institutional Equities - Analyst : Yes, that helps. Thank you very much. I'll hope back in the queue.

Question: Tazeen Ahmad - Bank of America - Analyst : Hi, guys. Good morning. Thanks for taking my question. And maybe wanted to stay on topic with SYFOVRE. Your competitor has been wanting, it seems, to provide a lot of detail about the cadence of their launch, providing a first stab at guidance and then revising it at their last call upward. I know a question that investors had is when Apellis would feel comfortable providing guidance on sales. And I think that's also tied to how people think you think the rate of growth of the market is going to be. I think there's some questions about the size of GA with the two products currently approved. So what are you feeling that you need comfort on in order to provide, let's say, full year sales guide on a go-forward basis? And how are you thinking that's going to be reflected about how you're thinking about the size of the overall opportunity? Thanks.

Question: Anupam Rama - JPMorgan Chase & Co - Analyst : Hey, guys. Thanks so much for taking the question. Do you think your sales team is sort of rightsized to get to that next tier of docs that you're talking about in terms of prescribing SYFOVRE and a complement inhibitor? And any trends we should think about in terms of sampling for that next tier of physicians relative to what you kind of disclosed in 3Q? Thanks so much.

Question: Salveen Richter - Goldman Sachs Group, Inc. - Analyst : Thank you. Good morning. You noted that market growth is now being driven by the next group of retinal specialists. Could you just elaborate on who these specialists are and how large that group is? And if I could just also just go back to this flat to modest revenue growth in 4Q. Can you just help us understand what this accounts for in terms of gross to net?

Question: Yigal Nochomovitz - Citigroup Inc. - Analyst : Yeah, hi, guys. Thank you. So for my one question, I guess I'll ask a two part question. Could you just provide a little more clarity on this impact to the ASP? It sounds like there was something related to maybe a discount trigger in the contract related to order volume that may have just all lined up in the third quarter, if you could clarify that. And then regarding the duration and persistence of therapy, I'm curious if you've collected any data, Adam, in terms of the percent of patients that are staying on the therapy and then the percent that may be taking a break or don't return on schedule? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2024 / 1:30PM, APLS.OQ - Q3 2024 Apellis Pharmaceuticals Inc Earnings Call

Question: Yigal Nochomovitz - Citigroup Inc. - Analyst : Thank you.

Question: Philip Nadeau - TD Cowen - Analyst : Good morning. Thanks for taking our question. One follow-up and then one actual question on -- from us. Tim, you've been very clear where gross to net is going. I'm still not entirely clear where gross to net actually was in Q3. Could you quantify what the gross to net was in Q3? And then in terms of going forward, there's been some reports of vasculitis for IZERVAY in the adverse event database at the FDA. Has that had any impact on prescriber in the market from what you've seen? Curious to get your feedback from your feet on the street on those reports. Thanks.

Question: Philip Nadeau - TD Cowen - Analyst : Got it. Thank you.

Question: Philip Nadeau - TD Cowen - Analyst : No, no, I was just saying thank you. That's very helpful.

Question: Philip Nadeau - TD Cowen - Analyst : Great. That's helpful. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2024 / 1:30PM, APLS.OQ - Q3 2024 Apellis Pharmaceuticals Inc Earnings Call

Question: Ellie Merle - UBS Investment Bank - Analyst : Hey, guys. Thanks for taking my question. I want to talk a little bit more about the volume trends that you're seeing. So specifically, you said that you expect the sales ramp to be more gradual going forward. Just in terms of vial shift, does that mean we should REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2024 / 1:30PM, APLS.OQ - Q3 2024 Apellis Pharmaceuticals Inc Earnings Call expect similar vial growth in 4Q as in Q3? And just any more details you can give us on the volume trends you're seeing so far in October? Thanks.

Question: Ellie Merle - UBS Investment Bank - Analyst : Okay.

Question: Annabel Samimy - Stifel, Nicolaus & Company, Incorporated - Analyst : Hi. Thanks for taking my question. So I guess from the initial launch, it looks like you've got a lot of the low-hanging fruit and now it's a bigger push to get more. What are you seeing in terms of dynamic referrals? Like when a patient comes into the retinal specialists from the ophthalmologist or the optometrist, are they coming in for monitoring now or treatment? Are they typically severe enough to treat? Or are they still in a watchful waiting mode? And then you mentioned six conversations to convert a retinal specialist who wasn't an early adopter. Does this get worse as these patients from the optometrists and the ophthalmologists come in because there may be less severe? I just wanted to understand the dynamic there of what types of patients you're starting to see from those specialists -- from those -- from that group?

Question: Annabel Samimy - Stifel, Nicolaus & Company, Incorporated - Analyst : Okay. Thank you.

Question: Douglas Tsao - H.C. Wainwright & Co, LLC - Analyst : Hi, good morning. Thanks for taking my question. Maybe, Adam, just as a follow-up on that. I'm just curious in terms of if you could provide some color in terms of the messaging and what resonated with physicians to drive a rebound in share? Was it really that physicians simply weren't aware of some of these efficacy differentiation points? Have they lost focus on it? Perhaps were they sort of under a mistaken impression on the rate of vasculitis events?

Question: Douglas Tsao - H.C. Wainwright & Co, LLC - Analyst : And I guess just as a follow-up, I mean, between all those factors that you mentioned, Adam and Caroline, I mean, was there one in particular that you thought was perhaps -- or you've gotten feedback was misunderstood in the marketplace and as your reps have gone out sort of has been corrected?

Question: Douglas Tsao - H.C. Wainwright & Co, LLC - Analyst : Okay. Great. Thank you so much.

Question: Lachman Hackberry Brown - William Blair - Analyst : Hey, thanks for taking my question. We've already had a few questions this morning around the October trends for SYFOVRE. It sounds like you've recovered new patient share and you're seeing decent growth, but you're also guiding to sort of low to mid-single-digit volume growth in the fourth quarter. So can you just sort of reconcile some of those October trends that you've talked about with the full quarter commentary?

Question: Derek Archila - Wells Fargo - Analyst : Hey, guys. Thanks for taking my question. So just I wanted some help reconciling your comments on reaching profitability with current cash while anticipating flat to modest sales growth. I guess, what type of growth does that imply for SYFOVRE in 2025 and beyond? And I guess, maybe on the flip side, what levels of OpEx? And then another just to squeeze in, I guess, should we assume the sale of receivables is part of that funding strategy to profitability? Thanks.

Question: Derek Archila - Wells Fargo - Analyst : Got it. Thank you.

Question: Biren Amin - Piper Sandler Companies - Analyst : Hi, guys. Thanks for taking my question. Can you maybe talk about how many switches you're seeing from IZERVAY as part of the new patient share growth that you're experiencing in the last half of Q3? And for 2025, what's the SG&A increase that we should expect for C3, MPG? And I think Novartis mentioned that they have about 100-plus person sales force dedicated to nephrology. Thank you.

Question: Biren Amin - Piper Sandler Companies - Analyst : Great. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2024 / 1:30PM, APLS.OQ - Q3 2024 Apellis Pharmaceuticals Inc Earnings Call

Question: Lisa Walter - RBC Capital Markets - Analyst : Hi, guys. Thanks so much for taking my question. Maybe just one on SYFOVRE and given the recent negative CHMP opinion and also your competitor withdrawing from filing in the EU. How are you thinking about the possibility of potential approval and other ex US geographies, particularly UK, Australia, Canada, Switzerland? And also beyond those four countries, are there any other large foreign markets that are also on your radar? Thanks for taking the question.

Question: Lisa Walter - RBC Capital Markets - Analyst : Got it. Thanks so much.

Question: Greg Harrison - Scotiabank - Analyst : Hey, good morning. Thanks for taking my question. Looking at the feedback from ASN, everything was very positive there. Are you able to provide any additional color on physician feedback now that they've had some time to digest the data from the conference? And how are you thinking about your competitive positioning in those indications in the shorter and longer term? Thanks.

Question: Graig Suvannavejh - Mizuho Securities USA LLC. - Analyst : Good morning. Thanks for taking my question. My question is on your longer term and perhaps aspirational view around potential peak penetration of the complement inhibitor class, you've been great about providing granularity on current penetration, which I believe you said earlier might be at about 15%. But longer term, where do you think 15% can go? And how long do you think it might take to get there? Thanks.

Question: Laura Chico - Wedbush Securities - Analyst : Good morning. Thank you so much. Two clarifications for me. Just following up on the cash runway guidance. Just wanted to clarify, does that incorporate a C3G launch and revenue contribution? And then second, I think I might have missed it, but the average number of injections per patient, how has that changed over the course of the launch here? Thanks so much.

Question: Jon Miller - Evercore ISI Institutional Equities - Analyst : Hi, guys. Thanks for taking my follow up here. I'd love to ask more on the kidney indications. How do you expect -- obviously, it's a little early to discuss eventual label. But given you've got data in C3G, IC-MPGN both pre- and post-transplant, how do you expect your potential label to look relative to Novartis' considering the differences in trial design? And do you expect that proteinuria efficacy differences aside, is the patient population going to be materially broader for you guys?