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Apellis Pharmaceuticals Reports Third Quarter 2019 Business Update and Financial Results
[November 05, 2019]

Apellis Pharmaceuticals Reports Third Quarter 2019 Business Update and Financial Results


Dosed First Patient in Phase 3 Study of APL-2 for Treatment-Naïve Patients with Paroxysmal Nocturnal Hemoglobinuria (PNH)

Completed $220 Million Offering of Convertible Senior Notes Due 2026

Cash Position of $434.0 Million at Quarter-End

WALTHAM Mass., and CRESTWOOD, Ky., Nov. 05, 2019 (GLOBE NEWSWIRE) -- Apellis Pharmaceuticals, Inc. (Nasdaq: APLS), a clinical-stage biopharmaceutical company focused on the development of novel therapeutic compounds to treat disease through the inhibition of the complement system, today announced its third quarter 2019 financial results and business highlights.

“Apellis made continued clinical and business progress in the third quarter of 2019, highlighted by dosing the first patient in the Phase 3 PRINCE study for treatment-naïve patients with PNH and significantly extending our cash runway through a convertible senior notes offering,” said Cedric Francois, M.D., Ph.D., co-founder and chief executive officer of Apellis. “We look forward to presenting preliminary data on APL-2 in C3 glomerulopathy at the American Society of Nephrology Kidney Week later this week and releasing topline data from our Phase 3 PEGASUS trial of APL-2 in patients with PNH in January 2020.”

Business Highlights and Upcoming Milestones:

APL-2 in Systemic Indications

  • In October 2019, Apellis announced it will present preliminary clinical data on APL-2 (pegcetacoplan) in C3 glomerulopathy (C3G) at the American Society of Nephrology Kidney Week 2019 in Washington D.C. from Nov. 5-10. Data from eight patients in the C3G cohort of the Phase 2 DISCOVERY trial of APL-2 will be presented through study day 84 (12 weeks).
  • In September 2019, Apellis announced the dosing of the first patient in the Phase 3 clinical study, PRINCE (APL2-308), evaluating the efficacy and safety of APL-2 for treatment-naïve patients with PNH. The PRINCE study is a randomized, multicenter, open-label, controlled study that aims to enroll 54 treatment-naïve adult patients with PNH.
  • Apellis met with regulatory authorities this fall to discuss the program in cold agglutinin disease (CAD). The company will update plans and timing for further clinical development of APL-2 for patients with CAD in early 2020.

APL-2 in Geographic Atrophy

  • In September 2019, details about the company’s Phase 2 FILLY study investigating intravitreal APL-2 for the treatment of geographic atrophy (GA) secondary to age-related macular degeneration were published in Ophthalmology, the journal of the American Academy of Ophthalmology.
  • Apellis continues to expect its two Phase 3 trials for APL-2 in patients with GA will be fully enrolled by the end of the first quarter of 2020.

Corporate & Other Highlights

  • In September 2019, Apellis announced the closing of its offering of $220.0 million aggregate principal amount of 3.500% convertible senior notes due 2026. The notes are convertible into cash, shares of Apellis common stock, or a combination of cash and shares of Apellis common stock, at Apellis’ election.

Third Quarter 2019 Financial Results:

As of September 30, 2019, Apellis had $434.0 million in cash and cash equivalents, compared to $176.3 million as of December 31, 2018. This includes approximately $212.9 million in net proceeds raised in the offering of convertible senior notes in September 2019.

Apellis reported a net loss of $69.8 million for the third quarter of 2019, compared to a net loss of $35.5 million for the third quarter of 2018.

Research and development expenses were $51.3 million in the third quarter of 2019, compared to $29.5 million for the same period in 2018. The increase was primarily attributable to an increase of $9.7 million in clinical trial costs, an increase of $6.2 million in personnel-related costs primarily due to the hiring of additional employees, an increase of $2.5 million in manufacturing expenses, an increase of $2.2 million in pre-clinical study expenses, and an increase of $1.3 million related to research and development supporting activities, offset by a decrease of $0.1 million in device development expenses. The increases to research and development expenses relate to the continued advancement of the company’s clinical trial programs. Apellis expects its research and development expenses to continue to increase as the number of patients in its trials increases and the number of ongoing trials increases.

General and administrative expenses were $18.6 million in the third quarter of 2019, compared to $6.3 million for the same period in 2018. The increase was primarily attributable to an increase in employee-related costs of $6.0 million due to the hiring of additional employees, an increase in professional and consulting fees of $6.0 million, an increase in general office costs of $1.0 million and an increase of $0.2 million in insurance costs, offset by a decrease of $0.7 million in license agreement costs and $0.2 million in director stock compensation expense.

About Apellis
Apellis Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company focused on the development of novel therapeutic compounds for the treatment of a broad range of life-threatening or debilitating autoimmune diseases based upon complement immunotherapy through the inhibition of the complement system at the level of C3. Apellis is the first company to advance chronic therapy with a C3 inhibitor into clinical trials. For additional information about Apellis and APL-2, please visit http://www.apellis.com.

Forward-Looking Statements  
Statements in this press release about future expectations, plans and prospects, as well as any other statements regarding matters that are not historical facts, may constitute “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements relating to the implications of preliminary clinical data. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: whether the Company’s clinical trials will be fully enrolled and completed when anticipated; whether preliminary or interim results from a clinical trial will be predictive of the final results of the trial; whether results obtained in preclinical studies and clinical trials will be indicative of results that will be generated in future clinical trials; whether APL-2 will successfully advance through the clinical trial process on a timely basis, or at all; whether the results of such clinical trials will warrant regulatory submissions and whether APL-2 will receive approval from the FDA or equivalent foreign regulatory agencies for GA, PNH, CAD or any other indication; whether, if Apellis’ products receive approval, they will be successfully distributed and marketed; and other factors discussed in the “Risk Factors” section of Apellis’ Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 5, 2019 and the risks described in other filings that Apellis may make with the Securities and Exchange Commission. Any forward-looking statements contained in this press release speak only as of the date hereof, and Apellis specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.


APELLIS PHARMACEUTICALS, INC. 
CONDENSED CONSOLIDATED BALANCE SHEETS 
    
  December 31, September 30, 
   2018   2019  
      
Assets   (Unaudited) 
Current assets:     
Cash and cash equivalents $176,267,666  $433,994,644  
Prepaid assets  24,333,851   14,742,698  
Other current assets  1,837,704   2,457,530  
Total current assets  202,439,221   451,194,872  
Non-current Assets:     
Right-of-use Assets     13,332,783  
Property and equipment, net  977,918   1,592,787  
Other assets  116,421   236,515  
Total assets $203,533,559  $466,356,957  
Liabilities and Stockholders' Equity     
Current liabilities:     
Accounts payable $10,254,938  $11,836,609  
Accrued expenses  5,103,002   30,431,607  
Current portion of long-term debt  1,666,667   -  
Current portion of right of use liabilities     2,304,147  
Total current liabilities  17,024,607   44,572,363  
Long-term liabilities:     
Convertible senior notes     140,614,523  
Development derivative liability     130,103,000  
Term loan facility  18,722,321   -  
Promissory note  6,655,193   -  
Right-of-use liabilities     11,255,257  
Other liabilities  158,783   250,000  
Total liabilities  42,560,904   326,795,143  
Stockholders' equity:     
Preferred stock, $0.0001 par value; 10,000,000 shares authorized, and zero shares issued and outstanding at December 31, 2018 and September 30, 2019       
Common stock, $0.0001 par value; 200,000,000 shares authorized at December 31, 2018 and September 30, 2019 and 56,279,307 shares issued and outstanding at December 31, 2018 and 63,872,762 shares issued and outstanding at September 30, 2019  5,628   6,387  
Additional paid in capital  437,855,681   608,015,713  
Accumulated other comprehensive loss  (122,807)  (205,249) 
Accumulated deficit  (276,765,847)  (468,255,037) 
Total stockholders' equity  160,972,655   139,561,814  
Total liabilities and stockholders' equity $203,533,559  $466,356,957  
      






APELLIS PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
 Three Months Ended September 30, Nine Months Ended September 30,
  2018   2019   2018   2019 
                
                
 (Unaudited)
Operating expenses:       
Research and development$29,539,456  $51,319,017  $74,479,965  $142,497,342 
General and administrative 6,265,125   18,628,945   16,248,203   39,577,627 
Operating loss (35,804,581)  (69,947,962)  (90,728,168)  (182,074,969)
Loss on extinguishment of debt    (293,083)     (1,501,215)
Loss from remeasurement of development derivative liability    (263,000)     (10,103,000)
Interest income 858,425   1,341,811   1,468,957   3,630,314 
Interest expense (577,534)  (601,377)  (1,270,743)  (1,354,379)
Other (expense)/income, net (22,234)  (61,048)  (86,575)  (85,941)
Net loss$(35,545,924) $(69,824,659)  (90,616,529)  (191,489,190)
Other comprehensive gain:       
  Foreign currency gain (86,249)  (83,272)  (86,249)  (82,442)
Total other comprehensive gain (86,249)  (83,272)  (86,249)  (82,442)
Comprehensive loss, net of tax$(35,632,173) $(69,907,931) $(90,702,778) $(191,571,632)
Net loss per common share, basic and diluted$(0.64) $(1.10) $(1.69) $(2.79)
Weighted-average number of common shares used in net loss per common share, basic and diluted 56,201,299   63,752,719   53,770,400   68,737,045 
        

Investor Contact:
Sam Martin / Maghan Meyers
Argot Partners 
sam@argotpartners.com / maghan@argotpartners.com
212.600.1902

Media Contact:
Tracy Vineis
tracy.vineis@apellis.com
617.420.4839

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