[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section covers the unaudited financial statements, management's analysis, market risk, and internal controls [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) For the nine months ended September 30, 2022, Apellis Pharmaceuticals reported total revenues of **$52.8 million**, a significant increase from **$6.3 million** in the prior year period, driven by EMPAVELI product sales, resulting in a net loss of **$486.2 million**, an improvement from **$598.4 million** in 2021, with **$708.6 million** in cash and equivalents and an accumulated deficit of **$2.1 billion** [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet highlights key financial positions including assets, liabilities, and equity as of September 30, 2022, and December 31, 2021 Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | Sep 30, 2022 (Unaudited) | Dec 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $584,189 | $640,192 | | Marketable securities | $124,364 | $60,358 | | Total current assets | $831,937 | $824,047 | | Total assets | $872,892 | $881,765 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $115,446 | $131,847 | | Long-term development liability | $340,142 | $345,151 | | Convertible senior notes | $92,663 | $189,024 | | Total liabilities | $565,476 | $683,103 | | Accumulated deficit | $(2,142,869) | $(1,656,688) | | Total stockholders' equity | $307,416 | $198,662 | [Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%2F(Loss)) This statement details the company's revenues, expenses, and net loss for the three and nine months ended September 30, 2022 and 2021 Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Product revenue, net | $17,676 | $5,314 | $45,439 | $5,937 | | Total revenue | $22,056 | $5,650 | $52,759 | $6,273 | | Research and development | $95,207 | $87,733 | $287,813 | $267,688 | | General and administrative | $78,406 | $45,763 | $192,795 | $135,309 | | Total operating expenses | $174,994 | $133,645 | $483,319 | $453,146 | | Net operating loss | $(152,938) | $(127,995) | $(430,560) | $(446,873) | | Net loss | $(191,269) | $(195,571) | $(486,181) | $(598,421) | | Net loss per share | $(1.75) | $(2.28) | $(4.65) | $(7.31) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes cash flows from operating, investing, and financing activities for the nine months ended September 30, 2022 and 2021 Cash Flow Summary for the Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(373,001) | $(450,627) | | Net cash (used in)/provided by investing activities | $(64,236) | $162,636 | | Net cash provided by financing activities | $381,605 | $8,278 | | Net decrease in cash, cash equivalents and restricted cash | $(56,307) | $(281,737) | | Cash, cash equivalents and restricted cash at end of period | $585,448 | $285,308 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant accounting policies and events, including the company's liquidity position, deemed sufficient for at least the next twelve months - The company believes its cash, cash equivalents, and marketable securities of **$708.6 million** as of September 30, 2022, are sufficient to fund operations and capital expenditures for at least the next twelve months[33](index=33&type=chunk) Product Revenue, Net (in millions) | Period | Revenue | | :--- | :--- | | Three months ended Sep 30, 2022 | $17.7 | | Three months ended Sep 30, 2021 | $5.3 | | Nine months ended Sep 30, 2022 | $45.4 | | Nine months ended Sep 30, 2021 | $5.9 | - The development liability to SFJ Pharmaceuticals, related to funding for pegcetacoplan, stood at a carrying value of **$356.3 million** as of September 30, 2022, with payments due through 2027[54](index=54&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - Through a series of exchange agreements in 2021 and 2022, the company significantly reduced its convertible debt, with the aggregate principal balance of Convertible Notes held by third parties at **$92.7 million** as of September 30, 2022[70](index=70&type=chunk)[77](index=77&type=chunk) - Under the Sobi collaboration, Apellis is entitled to tiered, double-digit royalties on ex-U.S. sales and up to **$915.0 million** in milestone payments, recognizing **$1.6 million** in royalty revenue for the nine months ended September 30, 2022[106](index=106&type=chunk)[112](index=112&type=chunk) - The company has non-cancelable purchase obligations of up to **$112.1 million** for pegcetacoplan drug substance and components with its manufacturing partners[122](index=122&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management highlights the successful commercialization of EMPAVELI® for PNH, generating **$45.4 million** in net product revenue, and the advancement of intravitreal pegcetacoplan for Geographic Atrophy (GA) with an NDA under priority review [Overview](index=25&type=section&id=Overview) This overview discusses the commercialization of EMPAVELI®, the progress of intravitreal pegcetacoplan for GA, and future pipeline plans - EMPAVELI® (pegcetacoplan) was approved by the FDA in May 2021 for Paroxysmal Nocturnal Hemoglobinuria (PNH) and generated **$45.4 million** in net product revenue for the nine months ended September 30, 2022[134](index=134&type=chunk) - The company submitted a New Drug Application (NDA) to the FDA for intravitreal pegcetacoplan for Geographic Atrophy (GA) in June 2022, granted priority review, with an amendment expected to extend the PDUFA target action date to February 2023[136](index=136&type=chunk)[138](index=138&type=chunk) - The collaboration with Sobi for systemic pegcetacoplan covers ex-U.S. commercialization and co-development for multiple indications, including C3G, IC-MPGN, ALS, CAD, and HSCT-TMA[135](index=135&type=chunk)[139](index=139&type=chunk)[148](index=148&type=chunk) - The company plans to advance up to three new product candidates into clinical development in 2023, including a siRNA treatment, an oral alternative pathway inhibitor, and a novel compound for both GA and wet AMD[153](index=153&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section analyzes the changes in total revenue, operating expenses, and net loss for the three and nine months ended September 30 Comparison of Results for the Three Months Ended September 30 (in thousands) | Line Item | 2022 | 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $22,056 | $5,650 | $16,406 | 290% | | Research and development | $95,207 | $87,733 | $7,474 | 9% | | General and administrative | $78,406 | $45,763 | $32,643 | 71% | | Net loss | $(191,269) | $(195,571) | $4,302 | (2%) | Comparison of Results for the Nine Months Ended September 30 (in thousands) | Line Item | 2022 | 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $52,759 | $6,273 | $46,486 | 741% | | Research and development | $287,813 | $267,688 | $20,125 | 8% | | General and administrative | $192,795 | $135,309 | $57,486 | 42% | | Net loss | $(486,181) | $(598,421) | $112,240 | (19%) | - The **71% increase** in G&A expenses for Q3 2022 versus Q3 2021 was primarily driven by a **$15.7 million** increase in employee-related costs and a **$15.1 million** increase in professional fees and commercial preparation activities[186](index=186&type=chunk) - R&D expenses for Q3 2022 increased by **9%** year-over-year, mainly due to a **$12.3 million** rise in compensation costs, partially offset by an **$8.9 million** decrease in clinical trial costs following the completion of the Phase 3 DERBY and OAKS trials[185](index=185&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's cash position and management's assessment of its ability to fund future operations - As of September 30, 2022, the company had cash, cash equivalents, and marketable securities totaling **$708.6 million**[156](index=156&type=chunk) - Management believes current cash reserves, along with anticipated revenue and committed payments from Sobi, will fund operations at least into the first quarter of 2024[156](index=156&type=chunk)[224](index=224&type=chunk) - Net cash used in operating activities for the nine months ended September 30, 2022, was **$373.0 million**, a decrease from **$450.6 million** in the prior year period[215](index=215&type=chunk)[216](index=216&type=chunk) - Net cash provided by financing activities was **$381.6 million** for the nine months ended September 30, 2022, primarily from a follow-on common stock offering in March 2022 that raised net proceeds of **$380.1 million**[212](index=212&type=chunk)[221](index=221&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure is to interest rate sensitivity on its **$708.6 million** portfolio of cash, cash equivalents, and marketable securities - The company's market risk is primarily related to interest rate changes affecting its cash, cash equivalents, and marketable securities portfolio of **$708.6 million** as of September 30, 2022[230](index=230&type=chunk) - Due to the short-term and low-risk nature of its investments, the company does not expect changes in market interest rates to have a significant impact on its operating results or cash flows[230](index=230&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation as of September 30, 2022, the company's Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective at a reasonable assurance level - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of September 30, 2022[233](index=233&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the third quarter of 2022[234](index=234&type=chunk) [PART II. OTHER INFORMATION](index=38&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section includes additional disclosures such as risk factors, other required information, and a list of exhibits [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) The company directs investors to the risk factors discussed in its Annual Report on Form 10-K for the year ended December 31, 2021 - The report refers to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2021, for a comprehensive understanding of potential risks[236](index=236&type=chunk) [Other Information](index=38&type=section&id=Item%205.%20Other%20Information) The company reported no other information required to be disclosed under this item for the reporting period - There is no information to report under this item[237](index=237&type=chunk) [Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, which include forms of exchange agreements, CEO and CFO certifications, and various XBRL data files - Exhibits filed with the report include CEO/CFO certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL data files[239](index=239&type=chunk)

Apellis Pharmaceuticals, Inc. (NASDAQ:APLS) Q2 2022 Earnings Conference Call August 8, 2022 4:30 PM ET Company Participants Meredith Kaya - SVP, IR & Strategic Finance Adam Townsend - Chief Commercial Officer Cedric Francois - Co-Founder, President, CEO & Director Timothy Sullivan - CFO & Treasurer Federico Grossi - Chief Medical Officer Conference Call Participants Madhu Kumar - Goldman Sachs Group Umer Raffat - Evercore Anupam Rama - JPMorgan Tazeen Ahmad - Bank of America Lyla Youssef - Cowen Steven Seed ...

Financial Data and Key Metrics Changes - Total revenue for Q1 2022 was $14.4 million, consisting of $12.1 million in EMPAVELI net product revenue and $2.3 million in collaboration revenue from Sobi [23] - R&D expenses were $90.9 million, G&A expenses were $51.2 million, resulting in a net loss of $138.9 million [23] - As of March 31, 2022, the company had $965.3 million in cash, cash equivalents, and short-term marketable securities, which is expected to fund operations into Q1 2024 [23][24] Business Line Data and Key Metrics Changes - The launch of EMPAVELI in PNH generated approximately $12 million in U.S. net sales despite initial headwinds from the Omicron variant [8] - Over 150 start forms for EMPAVELI were submitted, with 30 received in Q1 2022, and over 75% of patient starts came from C5 inhibitor switches [12][13] - The company is advancing EMPAVELI as a therapy for rare complement-driven diseases, with ongoing clinical programs in ALS and HSCT-TMA [9] Market Data and Key Metrics Changes - The company is preparing for the NDA submission of pegcetacoplan for geographic atrophy (GA) later in Q2 2022, with significant unmet needs in the GA patient population [6][15] - GA affects over 5 million people globally, with 1 million in the U.S., highlighting the potential market size for pegcetacoplan [15][17] Company Strategy and Development Direction - The company aims to establish pegcetacoplan as the first treatment for GA, focusing on disease state education and engagement with retina specialists [15][17] - Plans include submitting a Marketing Authorization Application (MAA) in the EU in the second half of 2022 [17] - The company is also advancing its early-stage pipeline with three INDs expected over the next 18 months [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the financial position, allowing for a strong NDA submission and potential launch despite challenging market conditions [11] - The company is committed to addressing the significant unmet need in GA and is preparing for a potential launch by the end of 2022 [17] - Management highlighted the importance of the 18-month data from clinical studies, which showed continuous benefits for patients [19] Other Important Information - The company has onboarded key leadership positions in medical affairs, sales, and marketing to support the upcoming launches [17] - The company is focused on educating physicians and securing payer coverage for EMPAVELI and pegcetacoplan [14][15] Q&A Session Summary Question: European filing strategy for pegcetacoplan - The company plans to file in the second half of 2022, including 24-month data in the submission package [27] Question: GA market size and patient demographics - Approximately 40% of GA patients are legally blind in one eye, which is a target population for treatment [29] Question: Cash runway and profitability outlook - The recent capital raise extends the runway into Q1 2024, but profitability timelines remain uncertain [31][32] Question: Regulatory panel expectations - The company anticipates an FDA panel and believes the submission will not require major amendments based on 24-month data [34][36] Question: EMPAVELI patient mix and competitor landscape - The majority of EMPAVELI starts are from C5 inhibitor switches, with ongoing focus on executing the launch plan despite competitive noise [60][62]

Apellis Pharmaceuticals, Inc. (NASDAQ:APLS) Q4 2021 Earnings Conference Call January 28, 2022 4:30 PM ET Company Participants Meredith Kaya - Vice President, Investor Relations Cedric Francois - Co-Founder and Chief Executive Officer Adam Townsend - Chief Commercial Officer Federico Grossi - Chief Medical Officer Tim Sullivan - Chief Financial Officer Conference Call Participants Madhu Kumar - Goldman Sachs Jon Miller - Evercore ISI Anupam Rama - JPMorgan Steven Seedhouse - Raymond James Colleen Kusy - Bair ...