Apellis Pharmaceuticals Q4 2024 Earnings Call Transcript

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Provided by Quartr
February 28, 2025
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Operator

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the Apellis Pharmaceuticals Fourth Quarter and Full Year twenty twenty four Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer To ask a question during the session, you will need to press 11 on your telephone. You will then hear an automated message advising that your hand is raised.

Operator

To withdraw your question, please press 11 again. Please be advised that today's conference is being recorded. I would now like to turn the call over to Meredith Kaya, Senior Vice President, Investor Relations and Strategic Finance. Please go ahead.

Meredith Kaya
Meredith Kaya
SVP - Investor Relations & Strategic Finance at Apellis Pharmaceuticals

Good morning, and thank you for joining us to discuss Apellis' Fourth Quarter and Full Year twenty twenty four Financial Results. With me on the call are Co Founder and Chief Executive Officer, Doctor. Cedric Francois Executive Vice President of Commercial, David Aptesen Chief Medical Officer, Doctor. Caroline Baumal and Chief Financial Officer, Tim Sullivan. Before we begin, let me point out that we will be making forward looking statements that are based on our current expectations and beliefs.

Meredith Kaya
Meredith Kaya
SVP - Investor Relations & Strategic Finance at Apellis Pharmaceuticals

These statements are subject to certain risks and uncertainties, and actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional detail. Now, I'll turn the call over to Cedric.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Thank you, Meredith, and thank you all for joining us this morning. As we close out another year, I would like to recognize the progress our team has made. We achieved important milestones in 2024, strengthening our business while navigating some headwinds along the way. XIFO3 generated over 120% year over year U. S.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Net revenue growth. We presented positive Phase III valiant data with EMPADI and C3G and ICMPGN. We advanced our earlier stage pipeline and we fortified our financial position. Looking ahead, our strategy is focused on three key pillars. First, to transform the treatment of geographic atrophy with SYFOVRI3 second, to maximize Embabody's impact in rare diseases and third, to advance our innovative pipeline leveraging our expertise in complement science.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Starting with pillar number one, XIFO3 is the market leading treatment for geographic atrophy in The U. S. With more than 510,000 injections administered through December. Recent regulatory developments within the competitive landscape confirm our view that XIFOvary is the leading treatment for GA. XIFOVRI's unmatched prescribing label, which includes increasing effects over time and flexible dosing, will enable us to further strengthen XIFOVRI's market leadership over time.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

SIFOVRI has generated nearly $900,000,000 in sales in less than two years, making this one of the most successful launches in recent history. With only two approved treatment options available and no new competitors on the horizon, we are in a strong position. Our two key priorities heading into the rest of 2025 are to secure Syphobi's leadership and to grow the overall GA market. We are still in the early phases of growth and estimate that only half of diagnosed GA patients are seen by an eye care professional. Of those less than ten percent are receiving treatment.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Building a new market takes time, but we have the right product, strategy and team to execute. The U. S. Is our primary commercial focus for SYFYVI, but we will continue to explore Select's international markets. We were pleased to receive approval from the Therapeutics Goods Administration in Australia last month and our regulatory review in Switzerland is ongoing.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

As we continue to focus our efforts on the CIFO relaunch, we are also working to develop the next generation treatment for GA. G8. To do this, we are combining safe ovary and APL three thousand and seven r and siRNA. This approach is designed to comprehensively block complement activity in the retina as well as the choroid through local and systemic C3 inhibition. We plan to initiate a Phase II trial in the second quarter.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Shifting gears then to our second pillar, maximizing the impact of empaveri in rare diseases. Empaveri continues to elevate the standard of care in PNH. We also look forward to becoming a leader in nephrology, starting with the anticipated launch of empavity in C3G and primary ICMPGN. We recently filed a supplemental NDA for empavity based on the positive Phase III value data. These results hit the TRYF sector with unprecedented reductions in proteinuria, significant clearance of C3 deposits and stabilization of eGFR.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Even more compelling was that these results were consistent regardless of disease type, transplant status or age. If approved, we expect to launch in the second half of twenty twenty five. Our partner Sobe recently received validation of its application, putting them one step closer to making this life changing treatment available to patients in The EU. In the second half of twenty twenty five, we are also planning to initiate Phase three trials for Empaveri in two new nephrology indications, focal segmental glomerulosclerosis and delayed graft function. Lastly, our third pillar, our innovative pipeline.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

We are excited to be advancing the first ever gene editing approach targeting the neonatal Fc gamma receptor with our partner Beam Therapeutics. We look forward to sharing more about this program and our broader emerging pipeline with all of you soon. We are excited about the future of Abenis. We have two potential blockbuster products with Xiphobri and Abaveni, a robust development pipeline of clinical and preclinical programs and a clear path to profitability. I will now turn the call over to David Acheson, our new Executive Vice President of Commercial.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

I'm sure many of you are familiar with David from previous earnings calls and investor events, and we are thrilled that he is now leading our commercial organization. David?

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

Thank you, Cedric, and good morning, everyone. Let me start with Xiphobri. With over 510,000 injections administered and nearly $900,000,000 in net sales, Xiphobri has had a remarkable launch. Our focus going forward is to both strengthen our leadership position and grow the overall market. The recent regulatory update from our competitor provides us more confidence than ever in the strength of Xyfobri's differentiated profile.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

Three things now are very clear. Xyfobri has consistently demonstrated robust and increased in effects over time. SYFOVRI is the only GA product approved for as few as six doses per year and SYFOVRI is the only product in a preferred position with many payers. In the fourth quarter, SYFOVRI maintained its market leadership with approximately 94,000 doses delivered to physician offices, including 89,000 commercial doses and 4,600 samples. Total market share remained stable at over 60% and new patient share trended positively ending the year approaching fifty percent.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

As of December, there are more than 2,300 sites of care that have ordered SYFOPRI. SYFOPRI's fundamentals remain strong. In the first two months of twenty twenty five, we are seeing continued growth in the number of SYFOBRI injections administered, which is the true measurement of demand. There are, however, a few temporary factors expected to affect orders of commercial vials and net revenue in the first quarter. First, the overall GA market growth in the quarter has been tempered due to typical Q1 dynamics like Medicare reverifications and winter storms affecting distribution and patient visits.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

And second, we have also seen a spike in sample usage over the past two months. We believe retina specialists are using more samples because of a reported funding gap at non for profit co pay assistant organizations. We estimate there could be 5,000 or more incremental samples used in this quarter as compared to the average quarterly sample volume in 2024. The momentum we are seeing in injection demand to date sets the stage for continued growth in 2025 and beyond. Maximizing the GA opportunity will require a long term and strategic approach.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

We need to make sure each patient has access to a retina specialist who can treat them. We need higher utilization from those physicians who are already treating patients with Xiphobri as well as adoption by retina specialists who may have initially been hesitant to utilize GA treatments. And we must continue to further strengthen our formulary positions being the only GA products with preferred status provides a significant competitive advantage. We're executing across key initiatives to achieve these goals, including broadening our reach to the eye care community, amplifying real world data through key forums, educating payers on Xiphobry's differentiated value and proposition and connecting with patients through our DTC campaign. We recently launched Phase two of our DTC campaign featuring Henry Winkler.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

This campaign focuses on increasing awareness of GA and Xiphobri and ensuring GA patients are able to connect to a retina specialist who can treat them. Now, let me shift to empivendi. The commercial and medical teams are ramping up their efforts in anticipation of Empovelli's potential label expansion into C3G and ICMPT N later this year. We are in the process of hiring our field based team, which will allow us to hit the ground running and make a significant impact in the early phases of the launch. Ahead of approval, we are executing several pre launch activities focusing on disease state awareness.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

These include participation in key nephrology conferences, building relationships with key physician accounts, KOL and payer engagement and patient education. These activities maximize the likelihood of a successful launch in C3G and iCMPGN. They also reinforce our commitment to rare nephrology with our programs in DGF and FSGS. The commercial opportunity is significant with an estimated five thousand C3G and iCMPGN patients in The U. S.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

Empavelli is the only drug to be studied in a broad patient population. Given the strength of the Phase three data, we believe Empavelli will be used across all patient groups and disease severity. Physician feedback has been consistent that treatment choice will be based on efficacy over the route of administration given the severity of C3G and ICMPGN. Many patients, even those with mild to moderate disease will eventually suffer kidney failure. In PNH, Opiolya generated approximately $23,000,000 in U.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

S. Net product revenue in the fourth quarter. Compliance rates remain high at ninety seven percent and the safety profile remains consistent with our previous updates. We expect continued competitive pressure in 2025, but this should be more than offset by initial revenue generated from C3G and ICMPGN. With that, I will now turn the call over to Carolyn.

Meredith Kaya
Meredith Kaya
SVP - Investor Relations & Strategic Finance at Apellis Pharmaceuticals

Thanks, David, and good morning, everyone. I'll start with Xiphovry. We continue to see evidence supporting Xiphovry's strong efficacy and consistent benefit to GA patients over long periods of time. Earlier this month, we presented forty eight months data from our Gail Extension study that reinforced Xfovir's increasing effects over time. These data demonstrated that early treatment with Xfovir leads to preservation of retina tissue at magnitudes of approximately 1.5 disc areas on average at 48 in noncifovial GA patients dosed monthly.

Meredith Kaya
Meredith Kaya
SVP - Investor Relations & Strategic Finance at Apellis Pharmaceuticals

For context, 1.5 disc areas is the size of approximately two fovea areas, which is considered highly meaningful by retinal specialists. We are also beginning to see real world evidence of the benefits of SYFOVRI treatment. An independent analysis of real world data concluded that by month nine of treatment SYFOVRI reduced the annualized growth rate of GA by over forty percent. Separately, another analysis of real world data following SYFOVRI treatment showed stable visual acuity over multiple injections. While there are always limitations to independent analyses, these results add to the extensive clinical dataset for Xiphobri and strengthen confidence in its treatment benefit.

Meredith Kaya
Meredith Kaya
SVP - Investor Relations & Strategic Finance at Apellis Pharmaceuticals

As Cedric mentioned, we are also developing a next generation treatment for GA. We believe combining Cyfovary and our siRNA APL3007 may provide comprehensive complement blockade in the retina and in the choroid. Specifically, Cyfobri inhibits complement in the retina and APL3007 is intended to target systemic complement activity in the eye. With less C3 present in the eye following administration of APL3007, there may be an even higher degree of efficacy contribution from sites over Last month, we shared Phase one data with APL three thousand and seven in healthy volunteers showing greater than 90% knockdown of C3 products as measured by the remaining levels of protein in the blood. We expect to initiate a Phase two study with SYFONVRI and APL3007 in GA patients in the second quarter.

Meredith Kaya
Meredith Kaya
SVP - Investor Relations & Strategic Finance at Apellis Pharmaceuticals

Shifting to Empavelli, the Phase three Valiant results provided further confidence in Empivelli's ability to control complement and provide a meaningful difference to patients with rare kidney diseases. Based on these data and the strong rationale for complement inhibition, we plan to initiate two pivotal studies with Empovelly in the second half of this year. One in primary focal segmental glomerulosclerosis or FSGS and one in delayed graft function or DGF. The complement pathway plays a significant role in both diseases and there are currently no FDA approved therapies. FSGS is a rare kidney disease that causes scarring of the glomeruli.

Meredith Kaya
Meredith Kaya
SVP - Investor Relations & Strategic Finance at Apellis Pharmaceuticals

Similar to C3G and ICMPGN, FSGS results in end stage kidney disease within five to ten years for approximately half of patients. There are an estimated thirteen thousand primary FSGS patients in The United States. DGS is a complication in kidney transplantation where the transplanted kidney fails to function and typically requires dialysis within the first week of transplant. This negatively affects the long term survival of the kidney and overall patient outcomes. In 2023, there were an estimated twenty one thousand transplants in The U.

Meredith Kaya
Meredith Kaya
SVP - Investor Relations & Strategic Finance at Apellis Pharmaceuticals

S. Using deceased donor kidneys. DGF occurred in thirty percent to thirty five percent of these transplants. FSGS and DGF were chosen due to their high unmet need, significant complement involvement and our ability to move directly into pivotal programs with potential approvals by 02/1930. Given our leadership and expertise in complement, we are uniquely positioned to bring treatments to patients with these devastating diseases.

Meredith Kaya
Meredith Kaya
SVP - Investor Relations & Strategic Finance at Apellis Pharmaceuticals

I will now turn the call over to Tim for a review of the financials. Tim?

Timothy Sullivan
Timothy Sullivan
CFO at Apellis Pharmaceuticals

Thank you, Caroline. I will now provide an overview of our financials. Additional details are available in the press release that we issued earlier this morning. Total revenue for the fourth quarter of twenty twenty four was approximately $213,000,000 including $168,000,000 in SYFOVRI and $23,000,000 in Emto Valley U. S.

Timothy Sullivan
Timothy Sullivan
CFO at Apellis Pharmaceuticals

Net product revenue. Total revenue for the full year 2024 was $781,000,000 a nearly 100% increase as compared to 2023. Turning to the rest of the P and L. For the fourth quarter, cost of sales was $40,900,000 dollars R and D expenses were $76,400,000 SG and A expenses were 121,500,000 and we reported a net loss of $36,400,000 Regarding SYFOVRI, gross to net remained stable relative to the third quarter. We anticipate gross to net to be in the low to mid-twenty percent range through 2025.

Timothy Sullivan
Timothy Sullivan
CFO at Apellis Pharmaceuticals

We took a 1% price increase on January 1 that is intended to help offset some of the ASP erosion while managing customer reimbursement. We continue to execute against our strategy while maintaining financial discipline. We made strong progress from a financial perspective in 2024. As you can see on Slide 17, our total revenue in 2024 nearly matches our non GAAP expenditure. With $411,000,000 in cash and cash equivalents at the end of 2024, we remain confident in our financial position.

Timothy Sullivan
Timothy Sullivan
CFO at Apellis Pharmaceuticals

We anticipate operating expenses in 2025 to be relatively stable compared to 2024. We expect our existing cash combined with our future product sales to be sufficient to fund our core business to profitability. I will now hand the call back over to Cedric for closing remarks.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Thanks, Tim. We have started twenty twenty five from a position of strength and are focused on building on the success of CytoBryn, preparing for our second commercial launch with Empaveri in C3G and ICMPGN, progressing our pipeline and solidifying our financial position. By doing this, we remain confident in our ability to create significant value for patients and shareholders over the coming years.

Operator

And our first question will be coming from John Miller of Evercore ISI. Your line is open.

Jonathan Miller
Managing Director at Evercore ISI

Hi guys. Thanks so much for taking my question and congrats on all the progress. One on Empovelli and the kidney indications I guess and a quick follow-up on that. Obviously your primary endpoint showed really great results with the spot test and new ACR, but the competitor had a twenty four hour endpoint.

Jonathan Miller
Managing Director at Evercore ISI

I know you said in the

Jonathan Miller
Managing Director at Evercore ISI

past that you looked at twenty four 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? And that would be great.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Hi, John. Thank you so much for that question. So look, we're very excited about the submission with Empaveri, of course, and looking forward to feedback in short order. The twenty four hours was consistent with what we saw with the SPOTs, but the endpoint, of course, was the SPOT. I think what is really important here is not just the proteinuria, right, but the consistency that we had across all the phenotypes of this disease, and across all kind of three important metrics that exist.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

There is, of course, the proteinuria, which had such a highly clinically meaningful reduction, but we also have the EGFR stabilization. And in addition to that, and I cannot overemphasize that, the impressive results on the histopathology, right? I mean, so when you look at these kidneys, you see the C3 deposits go away, melting like snow in the sun, quite frankly, over the course of a couple of months. And after six months, as much as seventy percent of patients have no more detectable C3 deposits. So that's something really important to bear in mind.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

We're excited about the submission, about what we can do for patients. And the submission for the publication will come out soon as well.

Timothy Sullivan
Timothy Sullivan
CFO at Apellis Pharmaceuticals

All right.

Jonathan Miller
Managing Director at Evercore ISI

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 be able to launch in second half of twenty twenty five that agency will be able to meet its PDUFA requirements and you'll get a timely review?

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Yes. So of course we have no control over macro, but at the current point in time there is no indication at all that there is any type of delay.

Jonathan Miller
Managing Director at Evercore ISI

Thanks so much.

Operator

Thank you. And one moment for our next question. Our next question will be coming from Tazeen Ahmad of Bank of America Securities. Your line is open, Tazeen.

Tazeen Ahmad
Tazeen Ahmad
MD - US Equity Research at Bank of America

Great. Thank you. Good morning, guys. I have a couple of questions regarding Cyfovary. So just based on the metrics that you cited or really trends in the first quarter, how should we be thinking about results in the first quarter relative to 4Q?

Tazeen Ahmad
Tazeen Ahmad
MD - US Equity Research at Bank of America

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.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Yes, I'm going to hand it over to David.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

Hey, Tazeen, it's David. I hope

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

you're doing well. Thank you for the question. So like we talked about in the call, some of the things that we're seeing in Q1 are transit impact to what we think will impact net revenue. And while they are anticipated to be temporary, we do think that Q1 will be lower than Q4 as a result. And we're not going to guide on anything for Q1 beyond that, but that's where we are currently at least with what we've seen so far.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

The other thing to note too by the way is, one of the things that is really positive for us is that the good news we're seeing injections, which we talked about in the call as well, grow in Q1 versus Q4, which is very positive for us. And we expect so once we get some of these temporary impacts against the Q1 numbers out of the way, we should see and continue to see and expect to see twenty twenty five to have growth.

Tazeen Ahmad
Tazeen Ahmad
MD - US Equity Research at Bank of America

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 IZURVEY will say monthly injection relative to every other month because it does seem based on our doc checks that up until now, docs seem to have adopted every other month. Do you think that that practice will change?

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

Yes. So look, I think it's a little bit early here, right? In regards to the label change, I think there's still some things here that folks are still trying to figure out. I will tell you, myself and Caroline, which I'll hand to in a second for some comment, we were at the Immaculate Society when this came out, which is a prestigious meeting that was held in Florida. And the general talk and discussion was around Cyfobre and the every other month dosing.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

I think the more important part was the follow on to that, which is we had a lot of robust data that was presented at that meeting, that really helped us to solidify even further that Xfobre's consistent increased effects over time is going to have impact, and is it having impact? That was a lot of the discussion. Plus we're the only product that is can be treated and it's in the label for as few as six doses a year. And we're the only product that has preferred positions with payers. That was the conversation at MagnaLife Society.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

So, I'll hand it over to Caroline for additional comments.

Meredith Kaya
Meredith Kaya
SVP - Investor Relations & Strategic Finance at Apellis Pharmaceuticals

Thank you. Hi, Tazeen. What I hear from my colleagues and what I know from being a physician is that efficacy and convenience are really important driving factors for patients, physicians and payers. And we have consistently demonstrated efficacy with every other month dosing. This has not been demonstrated with IZURVEY in a clinical trial.

Meredith Kaya
Meredith Kaya
SVP - Investor Relations & Strategic Finance at Apellis Pharmaceuticals

And the FDA did not approve them for every other month dosing. So our label includes all of our benefits, our efficacy, increasing effects over time in a flexible dosing regimen that includes monthly and every other month dosing.

Operator

One moment for our next question. Our next question will be coming from Anupam Rama of JPMorgan. Your line is open.

Anupam Rama
Anupam Rama
Analyst at JP Morgan

Hi, thanks for taking the question. This is actually Malcolm Cuneau for Autopon. So with the ISRVA headwinds over the last several months and the updated label, what are you hearing from payers on the potential for preferred tiering for CytoBRA?

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

Yes, Malcolm, thank you. It's David. Thanks for the question. So we're really fortunate to have a number of payers and sizable plans to have us in a preferred position. I think it's a little hard to forecast what that looks like.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

But I will tell you, when we look at and have conversations with the payers, it really comes down to every other month dosing and the fact that we have it in the label with the efficacy that matches up to that. So those are the things to keep in mind. And we'll see what happens in the future, but I can't really predict what will happen moving forward with the payers, at least at this point in time.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Great. Thank you.

Operator

Thank you. One moment for our next question. Our next question will be coming from Salveen Richter of Goldman Sachs. Your line is open Salveen.

Salveen Richter
Salveen Richter
Biotechnolgy Equity Research at Goldman Sachs

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 SIFOvary 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 potential label update for IZURVE A and the formulary status and expansion ex U. S? Thank you.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Thank you, Salveen. So I think first of all, really important to bear in mind, injections continue to grow, right. And that is reflection of the unmet need in this disease. Remember, fewer than ten percent of patients with geographic gastric sleeve have been treated and only about half of patients are currently being seen by accurate professionals. So the opportunity there to do good for patients and to generate revenue is enormous as it has always been.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

So, that is as far as the overall market is concerned. Competitively, quite frankly, I think we are in an enviable position right now. Last year, of course, we went through several motions, but at the end of the day, I think it's important to bear in mind that the CRL for our competitor, beyond whether it's resolved or not now, really called out the shortcomings that our competitor has, most notably the fact that there is or that there was a twelve month limitation initially, which a lot of physicians did not know. And then of course also the lack of data for every other month dosing. So I think it was important to kind of level set the knowledge around two products so that physicians can take the right decision.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

So we're very excited about where 2025 is heading and beyond as well.

Operator

Thank you. And one moment for our next question. Our next question will be coming from Yigal Nochomovitz of Citigroup. Your line is open.

Yigal Nochomovitz
Yigal Nochomovitz
Director at Citigroup

Hey, Cedric and team. Thanks for the question. I had a question on the combo trial with seven Siphobri. How are you thinking about the phasing of the dosing there given the intravitreal and the systemic? Are you going to interweave them?

Yigal Nochomovitz
Yigal Nochomovitz
Director at Citigroup

Or can you just talk more about the strategy for that combo dosing? And then will this Phase two have any comparison arm? Or is it just going to be a single arm study? Thank you.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Thank you so much, Yigal. So we're super excited about our 03/2007 program. And you are asking, as usual, an excellent question, which is we've thought carefully through how to implement this in a physician setting, right? So the idea there is that with a subcutaneous injection, you lower the systemic levels of C3, so turning off the faucet if you want, and you give a stoichiometric advantage, so dosing advantage to SYFOPRI, which you still need in the eye to control the enzymatic activity of the complement cascade, we will synchronize those injections to every two months and every three month administrations, both of which, so the intravitreal and the subcutaneous, both of which would happen in the physician's office, something that's something really important. There will be a dosing component to this as per usual, so that we can explore those two separate pathologies.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

But in the broader strategic context, I mean, we're looking forward to this year to growing the market NGA, truly establishing ourselves as we are the market leader, but growing that share that we have and then also to what we subjectively, of course, but I believe will be one of the, if not the most exciting developmental program in geographic atrophy by the end of this year and into 2026.

Yigal Nochomovitz
Yigal Nochomovitz
Director at Citigroup

Thanks. And maybe one for Tim. Just on Empovelli, obviously, you have a ton of really interesting larger indications coming down the pipe as you've alluded to the C3G, the CCNPGN, FSGS potentially, GFF VHF. 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 a very significant revenues on these follow on indications?

Timothy Sullivan
Timothy Sullivan
CFO at Apellis Pharmaceuticals

Yes, sure. If I heard you correctly, you asked if there was a way to kind of extend our exclusivity. Is that did I understand that from a patent perspective? Yes. Yes.

Timothy Sullivan
Timothy Sullivan
CFO at Apellis Pharmaceuticals

So So if we have composition of matter through kind of February and 02/1935 with customary extensions. So, that's still pretty reasonable runway for the indications that we discussed and we discussed that those are both chosen because we believe that we would have the ability to launch those, with a significant amount of patent life left. There are other things that we have in line. We also have, as Cedric mentioned, some combination product work ongoing that could really change the profile of our systemic administration of pegcetecolipids. So we're looking at lifecycle management initiatives as well.

Timothy Sullivan
Timothy Sullivan
CFO at Apellis Pharmaceuticals

But from a composition of matter perspective, 02/1935 is really where that runs out.

Yigal Nochomovitz
Yigal Nochomovitz
Director at Citigroup

Okay, got you. Thank you.

Operator

One moment for our next question. Our next question will be coming from Colleen Cusi of Baird. Your line is open, Colleen.

Colleen Kusy
Senior Research Analyst at Robert W. Baird & Co

Great. Good morning. Thanks for taking our questions. Congrats on the progress. So you've had some strong momentum on the payer front last year.

Colleen Kusy
Senior Research Analyst at Robert W. Baird & Co

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?

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Thank you, Colleen, and good to have you back. So I'm going to hand it over to David.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

Hey, Colleen, good to hear from you and thank you for the question. So we've got some big plans like Aetna is a great example that as of January 1, has us in a preferred position and, patient has to start with SEDCOVID before they could move to the competitive product. So there's some big plans that are out there. I think percentage wise, it's a little bit hard to, to talk through that because there's so many intricacies in the plans on how they actually look at this. And the downstream accounts in particular to the PBMs can make their own decisions on on what they want to do with that.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

So but I will tell you, we have a number of sizable plans and two major PBMs that have us in a preferred policy position for their downstream accounts to make those decisions on.

Colleen Kusy
Senior Research Analyst at Robert W. Baird & Co

Great. That's helpful. Thank you. And then for C3G and ICMPGN, have European regulators and U. S.

Colleen Kusy
Senior Research Analyst at Robert W. Baird & Co

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 U. S. Review?

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Yes. So it was a thank you so much for that question, Colleen. So our partners, Sobe and Aperis, have been in lockstep through all of this. And we're very excited about the global deployment of Embaverian U. S.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

And Sperivian ex U. S, of course. I think what and again kind of highlighting what we've mentioned many times. In The U. S, for example, we estimate there are approximately 5,000 patients.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

We estimate and we believe that we will only be competing with the only other products should it be approved that maybe on the market by the time we get there for about 1,000 out of those 5,000. So it's a really special opportunity for us and the numbers in Europe are quite a bit higher than 5,000. A really unique opportunity that deserves the prioritization that it gets within Aperis as well as with our partner Sobeys.

Meredith Kaya
Meredith Kaya
SVP - Investor Relations & Strategic Finance at Apellis Pharmaceuticals

Great. Thanks for taking our questions and congrats on Braga.

Operator

Thank you. One moment for our next question. Our next question will be coming from Phil Nadeau of TD Cowen. Your line is open.

Philip Nadeau
Managing Director at TD Cowen

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?

Philip Nadeau
Managing Director at TD Cowen

And what gives you confidence that this is just a Q1 issue and it won't persist later in the year?

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Sure. Thank you so much, Phil. So, look, the sampling are a reflection of a couple of factors. But one that stands out is what we spoke about before, which are these organizations that provide supports to physicians to help with the co pay of the product. That is not just for SYFORDI but for all intravitreal injections.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

It's important to note that we do not have real visibility on how this is managed. This is by design that it should be appropriately, these are independent organizations that determine how they manage their fundings. So we contribute, others contribute. We typically contribute at the beginning of the year, but it can happen throughout the year from other organizations. And it has happened before that they run out.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

So what then typically happens is that physicians will go towards sampling to be able to still take care of those patients, right? So I would say that the increase in samples is reflection of the fact that these patients are in need. There is a hopefully, and then by all expectations, temporary funding gap that physicians compensate for that with sampling.

Philip Nadeau
Managing Director at TD Cowen

Got it. That is helpful. And then, part of the question on Empevilli and C3G and I see MPGN in the slide deck you outlined for 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?

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Yes. Well, thank you so much, Phil. So again, I think you point on something that we're particularly proud of, which is that when we study these diseases, we went very broad, right? We said we're going to study C3G as well as ICF BGN, which are split about fiftyfifty in the population that we are targeting. We looked at pretransplant, but also post transplant, which is a second that often gets neglected.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

We studied pediatric patients as well as adults. And we studied what happens in this disease is sometimes C3 is depleted, sometimes it's not. We studied everything. And everywhere we saw a consistent response as far as the impact on the disease was concerned. So what that means moving forward because I think what you're asking us is where is kind of the where are the initial demographics.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

I think the post transplant segment is a particularly interesting one. I think it's also worth noting that within this small community of transplant nephrologists, Hempehradi is taking on quite a pristine reputation, not just because of the data that we had at Xalliance, but also because all of the recent xenotrans plants, so you may have seen in the news, the kidney transplants that are happening from genetically modified pigs, are transplants that were either rescued with Empaveri or are now, in all cases as far as we know, proactively being protected with Empaveri. So the I'd say the reputation of Empaveri to be able to control complement within the kidney is growing steadily and something that of course goes well for our launch later in this year.

Philip Nadeau
Managing Director at TD Cowen

That's very helpful. Thank you.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Thank you, Phil.

Operator

One moment for our next question. Our next question comes from Akash Tewari of Jefferies. Your line is open.

Katherine Wang
Katherine Wang
Equity Associate at Jefferies

Hi. This is Kathy on for Acosta. So on Accelis's earning call, they stated that docs were essentially warehousing patients and pausing their iZervae doses until the twenty four month label update rather than switching them to Sysobury. And then as such, they were expecting a bolus in March once dosing resumes. So given that I survey this label got updated a couple of weeks before the PDUFA with the two year data on the label, but without every other month dosing, what are you seeing in terms of SIFOVRI versus IZURVEY use within the past few weeks?

Katherine Wang
Katherine Wang
Equity Associate at Jefferies

And then what should we expect regarding dynamics on SIFOVRI versus IZURVEY going forward? And then what do you think your team needs to do to change, doctors' perception? Thank you.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Yes. So I think, I will answer the first part and then I will end it up with Caroline to talk about doctor perception, which is of course very important. But I think, look, there may have been some warehousing with certain physicians, with certain patients. The take home very clearly here is that we are the definitive market leader and we are growing that leadership. That is very clear from all of the intelligence that we have internally at Aperis and something that is rooted in the data that we have, right?

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

So I think that is the key message for us and I'll hand it over to Caroline to talk about how physicians currently view the products.

Meredith Kaya
Meredith Kaya
SVP - Investor Relations & Strategic Finance at Apellis Pharmaceuticals

Thank you, Cedric. Well, we hear a lot from our physician colleagues. We just attended three major meetings, most recently the Macchio Society. And physicians are very enthusiastic about our differentiated efficacy data and our long term data. I mean, we presented tissue saves and so much tissue that was that was over a disk and a half of retinal tissue that's saved with cyfovary use and we presented long term data patients who've been treated with cyfovary for forty eight months.

Meredith Kaya
Meredith Kaya
SVP - Investor Relations & Strategic Finance at Apellis Pharmaceuticals

So this is really unprecedented and this is the key driver amongst physicians. I think that in the end that physicians really speak to the scientific data and it's very meaningful for them.

Katherine Wang
Katherine Wang
Equity Associate at Jefferies

Okay, understood. Thank you. And then just like a super quick follow-up, it seems like could you provide some more color on inventory in Q4? Because it seems like quarter over quarter sales growth was about 10% versus valve growth was about 5%, but you mentioned that you had stable gross to net dynamics. Thank you.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

Yes. This is David. So thank you for the question. Coming out of Q4 and usually you'll see in any given quarter at the end of a quarter some move in regards to orders that will move inventory a little bit. We saw a little bit of course coming out of Q4 and sometimes you'll see a little bit more around the holidays, but it did not put us in a situation that we were out of the typical two to three week range that we have.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

And we may see a little bit of drawdown, in the front of Q1, but for the most part, it was not a significant number that we would be concerned about in any way.

Katherine Wang
Katherine Wang
Equity Associate at Jefferies

Got it. Understood. Thank you.

Operator

Thank you. One moment for our next question. Our next question will be coming from Ellie Merle of UBS. Your line is open, Ellie.

Ellie Merle
Ellie Merle
ED - Biotech Equity Research at UBS Group

Hey guys, thanks for taking the 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 discontinuation 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 this dynamic in 2Q and the rest of the year? You mentioned this was a temporary funding gap in the patient assistant organizations, but just curious what you expect over the course of the year in terms of the number of samples?

Ellie Merle
Ellie Merle
ED - Biotech Equity Research at UBS Group

Thanks.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Yes. Thank you so much, Eli. So first of all, as it relates to the adherence, we actually see adherence levels for SAD4B similar to what we have or what you find with anti VHFs, which is a very positive trend considering that anti VHF is kind of more viewed as an acute treatment with the immediate benefits, whereas with Xiphobri, as we all know, you make an investment in the future protection and these large amounts of tissue that you can preserve if you are fatal to the product. So that is something that we have no concerns around as it relates to the samples. I will have David answer that.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

Yes. So I think a couple of things. And just remember upfront, I think it's important to remember that samples being requested and put into a patient for treatment, is a sign of demand, which is very positive for us. And we're seeing the injections increase in Q1 versus Q4. So we feel good about that.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

I think a couple of things. First of all, we believe this is temporary and we anticipate that these issues that we're working on that the samples are being used in place of a commercial product will be fixed over time. We don't know what that looks like as far as timing. And the funding gap and when all of those things kind of come together that Cedric mentioned, it's really it's in the control of the groups that manages with patients and with physicians. So we really don't have an answer to that.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

But we will continue to supply samples if needed and put patients in a place where they can be treated.

Ellie Merle
Ellie Merle
ED - Biotech Equity Research at UBS Group

Got it. Thanks.

Operator

Thank you. One moment for our next question. Our next question comes from Annabel Samimy of Stifel. Your line is open Annabel.

Annabel Samimy
Annabel Samimy
Managing Director at Stifel Financial Corp

Hi. Thanks for taking my question. So I'm just trying to understand the competitive dynamics a little bit better for CYPHOVRI. Can you help us square away comments about leadership position of greater than 60% share, but then new patients is more like fifty-fifty and then we've got competitive headwinds coming from the label expansion, but then you 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 Cyphovir. So I guess maybe you can help us really understand what that competitive headwind is that is pushing the new patient share to fiftyfifty, because it looks like everything is sort of lining up well for SIFOVR, even I'm not sort of able to square away why it's still fiftyfifty for the new patient share.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Yes. Thank you, Annabel. I think, look, we'll see where it ultimately will end up, of course, right? I mean, the direction is positive for us, right? So, but I think most importantly, even a couple of months ago, I think we were in a competitive situation where the data or the knowledge around our competitor was, I would say, weak in the retina community as far as it relates to what does this drug actually do, what does it do in the long run.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

A lot of physicians, as I mentioned, didn't know that this drug was only approved initially for a one year period. So that was called an act of surprise. So I think that there, we are now playing in a level playing field. And the level playing field, the differentiation on efficacy is incredibly robust, right? And that is being recognized by retina doctors.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

And that's not just on the magnitude basis, it is also on the longitudinal data. And I would say that it's a real turning point for us, that we're looking forward to working from. I don't know, Caroline, if you want to add something.

Meredith Kaya
Meredith Kaya
SVP - Investor Relations & Strategic Finance at Apellis Pharmaceuticals

Well, I think one of the things that really differentiates us with physicians is the every other month dosing. And we use clinical studies to guide us and the robust data we have, the heterogeneous broad patients that were studied, all demonstrate the efficacy into year four with every other month dosing, which will just increase the convenience and help patients stay compliant. So I mean, physicians continually come up to me, we're grateful for what we're presenting and show that this long term and every other month dosing speaks to their patient population.

Annabel Samimy
Annabel Samimy
Managing Director at Stifel Financial Corp

Okay, great. And if I could just ask a question on C3G MPGN launch, what are your expectations there? You're not Cybalta is clearly going to come out a little bit earlier, but you did mention that physicians are a little bit more focused on or 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?

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Yes. Thank you, Annabel. I think the key thing is that we see the demand in the request that we already get for competitive use and expanded use access spread. So the demand is fairly important. Remember, these are younger patients, about half of whom over a ten year period, which is not a lot when you're 20, right, or 30, a fifty percentage chance of losing their kidneys.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

So the need is incredibly high. And again, I want to emphasize that based on the data that we have, we will probably be competing probably only for about twenty percent of that overall bucket of patients. So a really important opportunity for us and for patients.

Meredith Kaya
Meredith Kaya
SVP - Investor Relations & Strategic Finance at Apellis Pharmaceuticals

Okay, great. Thank you.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Thank you.

Operator

One moment for our next question. Our next question will be coming from Douglas Tsao of H. C. Wainwright. Douglas, your line is open.

Douglas Tsao
Managing Director at H.C. Wainwright & Co.

Hi, good morning. Thanks for taking the questions. First question I had was in terms of the Serna plus Cyphovi product, Cedric. I know in the past you've spoken about Cyphovi 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 choroid, which is sort of adjacent to the RPE as well?

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Well, Doug, I'm very impressed with that question. You are correct. This is so the impact that SysPhobri has on the photoreceptors is near perfect, right, about 100% when you look in the first six months. I mean, it is an incredibly robust impact on those photoreceptors. The RB cells are the ones that continue today, of course meaningfully slowed down.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

And then the question that we're trying to answer here is, since if we're on the choroidal side, right, on the back of the eye, if we can lower C3 levels, will we be able to impact the RPE cells in a way that is similar to the photoreceptors? So excellent question and the answer is yes.

Douglas Tsao
Managing Director at H.C. Wainwright & Co.

Okay, great. And if I 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?

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

Hi, Dave. Thank you for the question. I think quantifying that is challenging for us and I would hate to take a guess at it. So it's something we're looking at. We've got a whole team of course that manages all the things that we do with payers, especially in our space with CMS.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

But I don't think I can quantify that at least at this time.

Douglas Tsao
Managing Director at H.C. Wainwright & Co.

Okay, great. Thank you so much.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

Thank you.

Operator

One moment for our next question. Our next question will be coming from Joseph Springer of Needham and Company. Your line is open, Joseph.

Joseph Stringer
Senior Analyst at Needham & Company

Hi, good morning. Thanks for taking our questions. Two from us. Just wanted to get your updated commentary on any on the switching dynamics between Cefobri and IZURVEY? And secondly, I know prior question asked about adherence rates, but just curious about compliance rates for Cifobre, for example, patients missing or skipping injection.

Joseph Stringer
Senior Analyst at Needham & Company

How does that look or how has that changed over time? Thank you.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

So this is David. Thank you for the question. A couple of things. I think Cedric and Caroline touched on already some of the compliance where we fall with Cytofrobori and it's about in the same range as ANTIVIDIA. So actually I feel good about that because for us to be in the GA treatment area with something that's that compliant, I think is very positive because it is a disease that was definitely slower than wet AMD.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

As far as the question on the dynamics of switching, so we look at this on a regular basis. I will tell you that we've had a number of weeks, especially during the CRL period that they had for the competitive product that we saw a number of switches. And I still think we're seeing that today in the first part of the front end of Q1. And the good thing is and I think what's driving my thinking around that is the fact that we are seeing an increase in injections in Q1 versus Q4. And I think that we're in a good place to see growth overall in 2025.

Operator

Our next question will be coming from Lachlan Hanbury Brown of William Blair. Your line is open.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Hey guys, thanks for taking the question.

Lachlan Hanbury-Brown
Biotech Equity Research Analyst at William Blair

I wanted to ask more about the efforts that you've made to get doctors off the sideline. You know, you've 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?

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Yes. So that is what we are seeing and thank you for that question. I think what is gratifying after three years of launch now is that the data becomes very clear, right? We have the extension study, the data becomes much more concise to communicate and the main message at Magdalena Society, which is one that I think really resonates the most is that if you are on four years of treatments with Cytofri, you could have up to three square millimeters of retina preserves, right? And three square millimeters of retina is one and a half disc areas.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

It's a huge amount of real estate in the back of the eye. That is when you tell physicians that it resonates incredibly well. That is the reality of this drug and one that we can now really use moving forward. The safety situation is very stable and efficacy is becoming the brand focus.

Lachlan Hanbury-Brown
Biotech Equity Research Analyst at William Blair

Thanks. And a follow-up, if I may, sort of following up on, I think, you guys earlier question on patent life for AMPIVELI. Just 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 than answers there, but just would be great to get your thoughts on sort of what you'd assumed.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Yes. Thank you so much. So these are look, we did a thorough analysis after the readout of Valient in the kidney based on the premise that we have nearly exquisite target engagements in the kidney, in the glomerulus. And we did the usual work that you do in that situation, the competitive analysis, the biology, what can we do with the patent life of the drug, and that is where these two DCC merge. So much more will follow, but we're excited about these indications and we'll get to four digits.

Operator

This year. One moment for our next question. Our next question will be coming from Ryan Deschner of Raymond James. Your line is open, Ryan.

Ryan Deschner
Ryan Deschner
Vice President - Equity Research at Raymond James Financial

Hi, good morning and thanks for the question. Have your expectations for gross to net in 2025

Ryan Deschner
Ryan Deschner
Vice President - Equity Research at Raymond James Financial

and a steady state evolved at all

Ryan Deschner
Ryan Deschner
Vice President - Equity Research at Raymond James Financial

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.

Timothy Sullivan
Timothy Sullivan
CFO at Apellis Pharmaceuticals

Yes. Thank you very much for the question. I'll take the gross to net piece and then hand it over to David for the impact of the DTC. So the simple answer is no. Our view on gross to net hasn't changed at all.

Timothy Sullivan
Timothy Sullivan
CFO at Apellis Pharmaceuticals

At the end of the third quarter, we did guide to low to mid-20s throughout the course of 2025 and that remains the same. And David?

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

Yes. Thank you, Tim. So I appreciate the question on DTC. It's a little early. We started running that commercial on television with Henry Winkler in mid January.

David Acheson
David Acheson
Senior Vice President of North America Commercial at Apellis Pharmaceuticals

But I can give you one piece of information that happens that will give you an indicator of some of the early impact that we can see. We did have the commercial run during the Saturday Night Live fiftieth anniversary special. We had about 15,000,000 views on the commercial, which was attributed to driving about 3,000 visits to our website at that time. So we can see things like that early. It's going to take time for us to see the total impact throughout the next several months.

Ryan Deschner
Ryan Deschner
Vice President - Equity Research at Raymond James Financial

Excellent. Thank you very much.

Operator

And we do have time for one more question. And our last question will be coming from Derek Acula of Wells Fargo. Your line is open.

Derek Archila
Derek Archila
Analyst at Wells Fargo

Hey, good morning and thanks for taking the question. Maybe just two for Tim. I guess how should we think about OpEx growth in 2025 relative to 2024? Is there going to be a lot of growth coming from some of the R and 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 through 2025?

Derek Archila
Derek Archila
Analyst at Wells Fargo

Thanks.

Timothy Sullivan
Timothy Sullivan
CFO at Apellis Pharmaceuticals

Sure. So from the perspective of OpEx versus 2024, as we said in our prepared remarks that we expect those to be more or less the same. I think that's probably the case when you think about what we've some cost savings from our European infrastructure, some of which we scaled down, that will be offset by some R and D expenditure that gets increased. And then from the gross margin perspective, we don't guide on that. There's a lot that goes into gross margin that sort of moves around.

Timothy Sullivan
Timothy Sullivan
CFO at Apellis Pharmaceuticals

But from a sampling perspective, I think we gave you everything we could from the perspective of color on how we project that. We really don't have any visibility. What we do know and what we did talk about is that we see an approximately 5,000 vial estimated increase of samples in this quarter. And so doing the math on that, you can kind of get to a reasonable idea of what our revenue is per vial. You can understand what that would be.

Timothy Sullivan
Timothy Sullivan
CFO at Apellis Pharmaceuticals

And frankly, that's the piece that we could right now kind of get into our gross margin impact in the first quarter, at least as an estimate. Beyond that, we really have no visibility, unfortunately.

Derek Archila
Derek Archila
Analyst at Wells Fargo

Got it. Thank you.

Operator

And I would now like to turn the call back to Cedric Fenchois for closing remarks.

Cedric Francois
Cedric Francois
Co-Founder, President, CEO & Director at Apellis Pharmaceuticals

Thank you so much. And thank you everyone for joining us this morning. If you have any follow-up questions, please feel free to reach out to Meredith. Thank you so much.

Operator

And this concludes today's conference call. Thank you for participating. You may now disconnect.

Executives
    • Meredith Kaya
      Meredith Kaya
      SVP - Investor Relations & Strategic Finance
    • Cedric Francois
      Cedric Francois
      Co-Founder, President, CEO & Director
    • David Acheson
      David Acheson
      Senior Vice President of North America Commercial
    • Timothy Sullivan
      Timothy Sullivan
      CFO
Analysts
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Earnings Conference Call
Apellis Pharmaceuticals Q4 2024
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