Apellis Pharmaceuticals Inc Q4 2024 Earnings Call Transcript

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 my question and congrats on all the progress. One on EMPAVELI and the kidney indications, I guess, and then a quick follow-up on that. Obviously, your primary endpoint showed really great results with the spot test and UACR but the competitor had a 24-hour endpoint. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 28, 2025 / 1:30PM, APLS.OQ - Q4 2024 Apellis Pharmaceuticals Inc Earnings Call I know you said in the past that you looked at 24 hours, but we haven't seen it yet. Do you plan on presenting that publicly? I assume it was included in the submission to the FDA. Do you have a sense of which metric the FDA is most focused on? Some commentary on that would be great.

Question: Jon Miller - Evercore ISI Institutional Equities - Analyst : Thank you. Maybe just as a quick follow-up. Given recent news coming out of the agency, I'd love to get a sense of your confidence level that you'll launch in second half of '25 that the agency will be able to meet its PDUFA requirements and you'll get a timely review.

Question: Jon Miller - Evercore ISI Institutional Equities - Analyst : Thanks so much.

Question: Tazeen Ahmad - Bank of America - Analyst : Great. Thank you. Good morning, guys. I have a couple of questions regarding SYFOVRE. So just based on the metrics that you've cited or really trends in the first quarter, how should we be thinking about results in the first quarter relative to 4Q? Could it be that sales would be lower this quarter for the reasons that you mentioned. And then regarding the beneficial status in Medicare Advantage, do you think that that's going to have an early and noticeable impact on new patient share in the year? Or do you think that's something that would happen more gradually? And then I have a follow-up. Thanks.

Question: Tazeen Ahmad - Bank of America - Analyst : Okay. And then my follow-up is about the label change that was made for the competing product. How important is it that the label for IZERVAY will say, monthly injection relative to every other month because it does seem, based on our doc check set up until now, docs seem to have adopted every other month. Do you think that practice will change?

Question: Malcolm Kuno - J.P. Morgan - Analyst : Hi. Thanks for taking my question. This is actually Malcolm Kuno on for Anupam. So with the IZERVAY headwinds over the last several months and the updated label, what are you hearing from payers on the potential for preferred tiering for SYFOVRE? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 28, 2025 / 1:30PM, APLS.OQ - Q4 2024 Apellis Pharmaceuticals Inc Earnings Call

Question: Malcolm Kuno - J.P. Morgan - Analyst : Great. Thank you.

Question: Salveen Richter - Goldman Sachs Group, Inc. - Analyst : Good morning. Thanks for taking my question. Could you give us a little bit more color on how we should think about the cadence of the SYFOVRE launch here in 2025, just given the commentary on 1Q being lower than 4Q, but there's growth in 2025. And also in the context of a potential label update for IZERVAY and the formulary status and expansion ex US. Thank you.

Question: Yigal Nochomovitz - Citigroup Inc. - Analyst : Hey, Cedric and team, thanks for the question. I had a question on the combo trial with OCO 07 and SYFOVRE. How are you thinking about the phasing of the dosing there given the intravitreal and the systemic? Are you going to interweave them? Or can you just talk more about the strategy for that combo dosing? And then will this Phase II have any comparison arm? Or is it just going to be a single arm study? Thank you.

Question: Yigal Nochomovitz - Citigroup Inc. - Analyst : Thanks. And maybe one for Tim. Just on EMPAVELI. Obviously, you have a ton of really interesting larger indications coming down the pipe, as you've alluded to, the C3G, MPGN, FSGS, potentially DGF. So as far as the patent looks like, do you have any comments on how you might extend that even further given the potential for very significant revenues on these follow-on indications?

Question: Yigal Nochomovitz - Citigroup Inc. - Analyst : Yes.

Question: Yigal Nochomovitz - Citigroup Inc. - Analyst : Okay. That's it. Thank you.

Question: Colleen Kusy - Robert W. Baird & Co. Incorporated - Analyst : Great. Good morning. Thanks for taking our question. Congrats on the progress. So you've had some strong momentum on the payer front last year. Can you put into context what percent of the market you have preferred positioning in? And how much more growth on the payer front do you expect to achieve in 2025?

Question: Colleen Kusy - Robert W. Baird & Co. Incorporated - Analyst : Great. That's helpful. Thank you. And then for C3G and IC-MPGN, have European regulators and US regulators historically approached that review similarly since we've seen some positive momentum on the European opinion front, just wondering how that decision might have read through to the US review.

Question: Colleen Kusy - Robert W. Baird & Co. Incorporated - Analyst : Great. Thanks for taking our question and congrats on progress.

Question: Philip Nadeau - TD Cowen - Analyst : Good morning. Thanks for taking our questions. First, a follow-up and another question. The follow-up is on your comments you made about the sampling. Can you go into a little bit more detail on the dynamics of why there's a funding shortage? And what gives you confidence that this is just a Q1 issue and it won't persist later in the year?

Question: Philip Nadeau - TD Cowen - Analyst : Got it. That is helpful. And then part of a question on EMPAVELI, C3G and IC-MPGN. In the slide deck, you outlined four buckets of patients with that disease. Can you talk about how you're going to focus your marketing? For example, will you focus on post-transplant patients where you're likely to be the only option or are there other elements or physicians that you think are our highest priority?

Question: Philip Nadeau - TD Cowen - Analyst : That's very helpful. Thank you.

Question: Eliana Merle - UBS Investment Bank - Analyst : Thanks for taking my question. In terms of TA, I guess, what's the latest that you're seeing in terms of patient adherence and what you're seeing in terms of any discontinuations, I guess sort of how we should be thinking about long term, what the destination rate or compliance on therapy might be? And then just a second question, in terms of your expectations for the number of samples beyond 1Q, I guess, what do you expect in terms of dynamic in 2Q on the rest of the year. You mentioned this was a temporary funding gap in the patient-assisted organizations. But just curious what you expect over the course of the year in terms of the number of samples. Thanks.

Question: Eliana Merle - UBS Investment Bank - Analyst : Got it. Thanks.

Question: Annabel Samimy - Stifel, Nicolaus & Company, Incorporated - Analyst : Hi, thanks for taking my question. So I'm just trying to understand the competitive dynamics a little bit better for SYFOVRE. Can you help us square away comments about leadership position of greater than 60% share. But then new patients is more like 50% and then we've got competitive headwinds coming from the label expansion with the new talk about positive trends in injection growth, preferred formulary status and positive feedback that you're getting from the community around efficacy and flexibility of SYFOVRE. So I guess maybe you can help us really understand what that competitive headwind is that is pushing the new patient share to 50-50 because it looks like everything is sort of lining up well for SYFOVRE, but I'm not sort of able to square away why it's still 50-50 for the new patient share.

Question: Annabel Samimy - Stifel, Nicolaus & Company, Incorporated - Analyst : Okay. Great. And if I could just ask a question on C3G, MPGN launch. What are your expectations there? You're not -- (inaudible) clearly got some out a little bit earlier, but you did mention that physicians were a little bit more focused on -- are a lot more focused on efficacy. But I'm curious the level of urgency patients have to get on treatment. And so what can we expect for, I guess, an early launch trajectory for that product?

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

Question: Douglas Tsao - H.C. Wainwright & Co, LLC - Analyst : Hi, good morning. Thanks for taking my question. First question I had was in terms of the (inaudible) SYFOVRE product, Cedric. I know in the past, spoken about SYFOVRE having a very powerful effect on preservation of photoreceptors and less so on RPE cells. And so I'm just curious, with this approach, is this sort of what you're specifically targeting by going after the chlorate, which isn't which is sort of a case to the RPE as well?

Question: Douglas Tsao - H.C. Wainwright & Co, LLC - Analyst : Okay. Great. And just a quick follow-up for David. Just I'm curious to the extent that you anticipate seeing an impact on the Medicare redesign for this year or if you can sort of quantify it at this point?

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

Question: Joseph Stringer - Needham and Company - Analyst : Hi, good morning. Thank you for taking my question. Two from us. Just wanted to get your updated comment, -- on any on the switching dynamics between Sobi and IZERVAY. And secondly, I know prior question asked about adherence rates, but just curious what about compliance rates for SYFOVRE, for example, patients missing or skipping injection. How does that look? Or how has that changed over time? Thank you.

Question: Lachman Hanbury-Brown - William Blair - Analyst : Hi, guys. Thanks for taking my question. I wanted to ask more about the efforts that you've made to get doctors off the sideline. You said that the sort of shift towards the efficacy-focused messaging is resonating well with physicians. But I'm wondering if you can sort of translate that into any changes of actual prescribing behaviors or new prescribers?

Question: Lachman Hanbury-Brown - William Blair - Analyst : Got it. Thanks. And a follow-up, if I may, sort of following up on your [got] earlier question on patent life for EMPAVELI. Curious if you can give any color on what you had assumed for IRA price negotiations when you were doing the sort of business cases for FSGS and DGF, I realize there's probably still more questions and answers there, but just would be great to get your thoughts on sort of what you'd assumed?

Question: Ryan Deschner - Raymond James - Analyst : Hi, good morning. Thanks for the question. Have your expectations for gross to net in 2025 and a steady state evolved at all in the last few months? And can you give us any more detail on what you're expecting to see in terms of timing and duration of the impact of the new DTC campaign on sales in 2025 and beyond based on what you saw in the prior campaign. Thank you.

Question: Ryan Deschner - Raymond James - Analyst : Excellent. Thank you very much.

Question: Derek Archila - Wells Fargo - Analyst : Hey, good morning, and thanks for taking my question. Maybe just two for Tim. I guess, how should we think about OpEx growth in 2025 relative to '24? Is there going to be a lot of growth coming from some of the R&D initiatives that you guys talked about. And just based on some of the seasonal factors in 1Q and the sampling, I guess how should we be thinking about gross margin trends to '25? Thanks.

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