Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Apellis Pharmaceuticals Inc (APLS, Financial) reported strong revenue growth with total revenue for Q2 2024 reaching approximately $200 million, including $155 million from Sipho Greek and $24.5 million from FLUS net product revenue.
- The company has a clear path to positive cash flow, bolstered by a strategic non-dilutive refinancing collaboration with Sixth Street, which improved liquidity and financial flexibility.
- Sipho Greek continues to show strong market performance, maintaining a 75% market share in the treated GA market and achieving double-digit percentage growth every quarter since launch.
- The company is advancing its pipeline with multiple earlier-stage development programs and expects to share progress at an upcoming investor day.
- Apellis Pharmaceuticals Inc (APLS) has secured broad coverage for Sipho Greek with two large national pharmacy benefit managers making it the preferred treatment on their commercial formularies.
Negative Points
- There are concerns about the competitive landscape for Cytori, with competitors experiencing tailwinds from new J-codes and other factors.
- The European GA opportunity faces uncertainties, with the CHMP reexamination process still ongoing and no guarantee of a positive outcome.
- The company reported a net loss of $38 million for the second quarter, despite strong revenue growth.
- There is a competitive market for PNH treatments, with the availability of an oral treatment impacting sales and leading to flat sales expectations for the next six to twelve months.
- The company faces challenges in expanding the GA market, with only 13% of diagnosed GA patients currently being treated and a need to increase awareness and education among eye care providers.
Q & A Highlights
Q: Do you expect the share of new starts currently around that 50% mark to grow again post a successful ASRS? And does your guidance to cash flow positivity assume more than the existing share of new starts in the US?
A: Cedric Francois (CEO): The new starts in the second quarter had tailwinds for the competitor, but we plan to recapture the lead on first injections. Adam Townsend (COO): We are already seeing growth and demand into July, and we are confident in maintaining our position as the number one GA drug.
Q: Your language on EU approval seems more positive now than it has in the past. How do you feel now versus how you thought last time you headed into an appeal?
A: Cedric Francois (CEO): The expectation remains the same. The ability to introduce new data, including prespecified endpoints of function, is encouraging. The process has gone according to plan, and we look forward to sharing the results in the fall.
Q: What are the factors driving the competitive position dynamics in the GA market following the permanent J-code for the competitor?
A: Cedric Francois (CEO): We are the market leader and plan to continue being so. The SRS meeting was a turning point, and the discussion has shifted towards efficacy. Adam Townsend (COO): Despite the competitor's tailwinds, we maintained approximately 50% of new starts and 75% of the total market.
Q: Can you give more color on what you are seeing on a month-by-month basis in the quarter? Was the J-code impact more like a first half of the quarter dynamic?
A: Cedric Francois (CEO): The market is large and growing, and we have a drug that is meaningfully differentiated on efficacy and dosing flexibility. Adam Townsend (COO): June was the highest month of the quarter and launch to date across multiple metrics. We saw double-digit growth for the quarter.
Q: How are physicians responding to the microperimetry data, and are they starting to adopt some of these tools to demonstrate to their patients that this is working?
A: Caroline Baumal (CMO): Physicians are excited about the microperimetry data, which is analogous to visual field testing. In the real world, they use OCT, which has also shown benefits. We have cases showing significant differences in GA growth between treated and untreated eyes.
Q: Can you provide any commentary on the background of the new rapporteurs for the EU review?
A: Cedric Francois (CEO): We don't provide details on that. The odds of success have remained stable, and the process has gone as expected. We hope to come back with positive news in the fourth quarter.
Q: What are you seeing in the marketplace on discounting, and what is Apellis' stance on discounting?
A: Adam Townsend (COO): We are taking a strategic and thoughtful view on contracting. This is a large and growing market, and we want to maintain as much value as possible. We have seen some switching from the competitor back to our drug, driven by efficacy and flexible dosing.
Q: Can you confirm if volumes were up in July versus June for Syfovre?
A: Adam Townsend (COO): We are thrilled with the strong growth continuing into July and expect it to continue for the rest of the quarter and beyond. We are seeing growth across multiple metrics.
Q: How are you thinking about what's clinically meaningful in the pre versus post-transplant setting for Valiant?
A: Cedric Francois (CEO): The post-transplant segment is intriguing because it's easier to track histopathology. Should our data be good, there is a real opportunity to differentiate from competitors. Efficacy will be the key driver.
Q: Are you considering switching to a branded DTC effort to focus on the competitive dynamics and the attributes of Syfovre?
A: Adam Townsend (COO): Yes, we have transitioned to branded DTC, focusing on Syfovre and its benefits. We are pushing hard on efficacy and flexible dosing.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
