Apellis Pharmaceuticals Reports Fourth Quarter and Full Year 2017 Financial Results

– Initiation of Phase 3 Programs in Geographic Atrophy (GA) and Paroxysmal Nocturnal Hemoglobinuria (PNH) Planned for 2018; Phase 2 Proof-of-Concept (POC) Data Anticipated in Autoimmune Hemolytic Anemia (AIHA) and Complement-Dependent Nephropathies (CDN) –

– Significant Progress Made in GA Indication; APL-2 Met Primary Endpoint in Phase 2 FILLY Study; Phase 3 Trial Design Finalized and Study Initiation Expected in 2H18; Recently Announced 18-Month Safety & Efficacy Data –

– $150 Million Raised in Initial Public Offering on Nasdaq; Cash Position of $175.6 Million at Year-End –

CRESTWOOD, Ky. and CAMBRIDGE, Mass., March 19, 2018 (GLOBE NEWSWIRE) — Apellis Pharmaceuticals, Inc. (Nasdaq:APLS), a clinical-stage biopharmaceutical company developing a platform of novel therapeutic compounds for the treatment of autoimmune diseases, today announced its fourth quarter and full year 2017 financial results and business highlights.

“In 2017 we made significant progress across our clinical programs and successfully completed our initial public offering. This momentum has continued into 2018, with the recently announced 18-month data from the Phase 2 FILLY trial in patients with GA reinforcing the statistically significant effect seen at 12 months and supporting our plans to move to Phase 3 in the second half of this year,” said Cedric Francois, MD, PhD, founder and chief executive officer of Apellis. “We plan to advance APL-2 in multiple indications throughout the upcoming year, including initiating Phase 3 trials in GA and PNH, Phase 2 proof-of-concept data readouts in AIHA and CDN, and data readouts in our Phase 1b eculizumab add-on and monotherapy expansion studies in PNH. We believe that APL-2 and our core focus of targeting the complement pathway centrally at the level of C3 has the potential to help patients with unmet needs in these indications, and in a broad variety of other complement-mediated conditions.”

Business Highlights and Upcoming Milestones:

APL-2 in Geographic Atrophy

  • In December 2017, Apellis announced that it had finalized the Phase 3 trial design evaluating APL-2 for the treatment of patients with geographic atrophy associated with AMD (GA), following discussions with the FDA. The Phase 3 trial of APL-2 in GA remains on track to begin in the second half of 2018.
  • In August 2017, Apellis announced that APL-2 met its primary endpoint of reducing the rate of lesion growth (measured as the change in the square root of the GA lesion area) compared to sham after 12 months of treatment in the Phase 2 FILLY trial in patients with GA, showing a statistically significant effect and what the Company believes to be a clinically meaningful effect.
  • Apellis recently reported 18-month data on its Phase 2 FILLY trial of APL-2 in patients with GA.

APL-2 in PNH

  • The Phase 3 trial of APL-2 in PNH remains on track to begin in the second half of 2018 and APL-2 Phase 1b eculizumab add-on and monotherapy expansion trial updates are anticipated in the first half of 2018.
  • In December 2017, Apellis presented an update on its Phase 1b PHAROAH trial evaluating treatment with APL-2 as add-on therapy with eculizumab in patients with PNH who have low hemoglobin levels, at the 12th Annual Scientific Assembly of the International PNH Interest Group (IPIG).
  • In June 2017, Apellis provided a clinical update on its two Phase 1b clinical trials with APL-2 in the treatment of patients with PNH, showing rapid and durable improvements in lactate dehydrogenase and hemoglobin levels in patients, both as monotherapy and as add-on therapy with eculizumab.
  • In March 2017, Apellis announced that the European Medicines Agency granted orphan drug designation for APL-2 in PNH.

APL-2 In Other Indications

  • The Phase 2 POC monotherapy data for APL-2 in AIHA remains on track for the first half of 2018.
  • The Phase 2 POC monotherapy data for APL-2 in four types of complement-dependent nephropathies, including IgA nephropathy, C3 glomerulonephropathy, primary membranous nephropathy, and lupus nephritis, are expected in the second half of 2018.

Other

  • In November 2017, Apellis completed an initial public offering of 11.7 million shares of common stock at $14.00 per share, raising net proceeds of $150.0 million, after deducting underwriting discounts, commissions and offering expenses.
  • Apellis expanded its management team in key functions during 2017. In March 2017, Steven Axon was appointed to the role of Chief Business Officer. Mr. Axon was previously Senior Vice President of Business Development at EMD Serono. In September 2017, Dr. Federico Grossi was promoted to the role of Senior Vice President of Clinical Development and Medical Affairs. In October 2017, Timothy Sullivan was appointed to the role of Chief Financial Officer. Mr. Sullivan was previously an observer on Apellis’ board of directors for nearly three years and a Partner at venture capital firm, AJU IB investment, where he led the firm’s life science company investments.
  • In November 2017, Apellis initiated a Phase 1 study with APL-9, a new product candidate, administered intravenously. Apellis will provide further updates on APL-9 in 2018.

Fourth Quarter and Full Year 2017 Financial Results:

As of December 31, 2017, Apellis had $175.6 million in cash and cash equivalents, compared to $24.9 million as of December 31, 2016. The increase was primarily due to the receipt of $150.0 million of net proceeds from Apellis’ initial public offering, which closed in November 2017, in addition to $19.7 million of net proceeds from a Series E preferred stock financing and $27.0 million in debt financing, partially offset by operating expenses incurred in the normal course of business.

Apellis reported a net loss of $18.3 million for the fourth quarter of 2017, compared to a net loss of $6.6 million for the fourth quarter of 2016. For the full year of 2017, Apellis reported a net loss of $51.0 million, compared to a net loss of $27.1 million for the full year of 2016.

Research and development expenses were $13.1 million in the fourth quarter of 2017, compared to $5.6 million for the same period in 2016. For the full year of 2017, research and development expenses were $40.3 million, compared to $23.0 million for the full year of 2016. The increase was primarily due to increases of $8.2 million in manufacturing expenses, $3.7 million in clinical trial costs, $2.9 million in employee-related costs primarily due to the hiring of additional personnel, $2.7 million related to research and development supporting activities, and $1.5 million in device development expenses, partially offset by a decrease of $1.7 million in preclinical study expenses.

General and administrative expenses were $4.9 million in the fourth quarter of 2017, compared to $1.1 million for the same period in 2016. For the full year of 2017, general and administrative expenses were $10.5 million, compared to $4.3 million for the full year of 2016. The increase was primarily due to an increase in employee-related costs of $3.8 million, an increase in professional and consulting fees of $1.5 million, and an increase in office, travel and related costs of $0.9 million.

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 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 such as the results referenced in this release 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 submission; whether APL-2 will receive approval from the United States Food and Drug Administration or equivalent foreign regulatory agencies; whether, if Apellis’ products receive approval, they will be successfully distributed and marketed; whether Apellis’ cash resources will be sufficient to fund the company’s foreseeable and unforeseeable operating expenses and capital expenditure requirements; and other factors discussed in the “Risk Factors” section of Apellis’ Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 19, 2018, 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.  
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS  
                 
  Three Months Ended          
  December 31,   Year Ended December 31,  
    2016       2017       2016       2017    
Operating expenses:                
Research and development $   5,591,572     $   13,132,853     $   22,978,599     $   40,303,878    
Cost of acquired in-process research and development                 —         —    
General and administrative     1,087,276         4,859,961         4,303,743         10,463,151    
Operating loss      (6,678,848 )       (17,992,814 )       (27,282,342 )       (50,767,029 )  
Loss from remeasurement of fair value of warrants     —         (153,692 )       —         (153,692 )  
Interest income (expense), net      51,167         (129,728 )       135,309         (96,915 )  
Other income, net     7,579         20,338         22,396         11,542    
Net loss and comprehensive loss  $   (6,620,102 )   $   (18,255,896 )   $   (27,124,637 )   $   (51,006,094 )  
Net loss per common share, basic and diluted  $   (0.79 )   $   (0.61 )   $   (3.22 )   $   (3.68 )  
Weighted-average number of common shares used in net                 
loss per common share, basic and diluted     8,428,366         30,007,513         8,428,366         13,870,949    
                 

 

APELLIS PHARMACEUTICALS, INC.    
CONSOLIDATED BALANCE SHEETS    
             
    December 31,    
      2016       2017      
Assets            
Current assets:            
Cash and cash equivalents   $   24,863,488     $   175,643,529      
Refundable research and development credit       1,347,804         1,297,361      
Prepaid assets       1,132,438         5,059,593      
Other current assets       25,000         14,823      
Total current assets       27,368,730         182,015,306      
Other assets        64,528         116,150      
Total assets    $   27,433,258     $   182,131,456      
Liabilities and Stockholders’ Equity            
Current liabilities:            
Accounts payable   $   2,547,212     $   3,663,253      
Accrued expenses       1,091,726         2,890,705      
Total current liabilities       3,638,938         6,553,958      
Long-term liabilities:            
Term loan facility       —         19,806,944      
Promissory note – related party       —         6,583,402      
Common stock warrant liability       —         244,292      
Total liabilities       3,638,938         33,188,596      
Stockholders’ equity:            
Series A convertible preferred stock, $0.0001 par value; 2,670,000 shares
  authorized, issued and outstanding at December 31, 2016 and zero
  shares authorized, issued and outstanding at December 31, 2017
      2,654,405         —      
Series B convertible preferred stock, $0.0001 par value; 6,362,658 shares
  authorized, issued and outstanding at December 31, 2016 and zero
  shares authorized, issued and outstanding at December 31, 2017
      6,944,148         —      
Series C convertible preferred stock, $0.0001 par value; 26,215,411 shares
  authorized, issued and outstanding at December 31, 2016 and zero
  shares authorized, issued and outstanding at December 31, 2017
      35,542,707         —      
Series D convertible preferred stock, $0.0001 par value; 21,099,351 shares
  authorized, issued and outstanding at December 31, 2016 and zero shares
  authorized, issued and outstanding at December 31, 2017
      46,913,666         —      
Preferred stock, $0.0001 par value; zero shares authorized, issued and
  outstanding at December 31, 2016 and 10,000,000 shares authorized,
  and zero shares issued and outstanding at December 31, 2017
      –         –      
Common stock, $0.0001 par value; 87,000,000 shares authorized and
  8,428,366 shares issued and outstanding at December 31, 2016 and
  200,000,000 shares authorized and 50,334,152 shares issued and
  outstanding at December 31, 2017
      843         5,033      
Additional paid in capital       29,996,110         298,201,480      
Accumulated deficit       (98,257,559 )       (149,263,653 )    
Total stockholders’ equity       23,794,320         148,942,860      
Total liabilities and stockholders’ equity    $   27,433,258     $   182,131,456      
             
             
CONTACT: Investor Contact:
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212.301.7218  (office)
929.400.2691  (mobile)

Media Contact:
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