Apellis(US:APLS)2024-11-05 11:57Revenue Generation - SYFOVRE generated $152.0 million and $444.0 million in U.S. net product revenue for the three and nine months ended September 30, 2024, respectively[133]. - EMPAVELI generated $24.6 million and $74.7 million in U.S. net product revenue for the three and nine months ended September 30, 2024, respectively, along with $5.0 million and $13.9 million in royalties from Sobi[135]. - For the three months ended September 30, 2024, the company recognized net product revenue of $176.6 million, compared to $99.2 million for the same period in 2023, representing a 78% increase[183]. - The net product revenue for the nine months ended September 30, 2024, included $24.6 million from EMPAVELI and $152.0 million from SYFOVRE sales[183]. - Total revenue for the three months ended September 30, 2024, was $196.8 million, an increase of 78% from $110.4 million in the same period of 2023[184]. - Net product revenue for the nine months ended September 30, 2024, was $518.8 million, a 128% increase from $227.6 million in the same period of 2023[200]. - Licensing and other revenue for the three months ended September 30, 2024, was $20.3 million, up 81% from $11.2 million in the same period of 2023[186]. - Licensing and other revenue increased to $50.1 million for the nine months ended September 30, 2024, compared to $22.6 million for the same period in 2023, representing a growth of 121%[201]. Financial Performance - The company has incurred net losses of $57.4 million and $140.2 million for the three months ended September 30, 2024 and 2023, respectively, with an accumulated deficit of $3.0 billion as of September 30, 2024[141]. - Net operating loss improved to $(47.3) million for the three months ended September 30, 2024, compared to $(137.1) million in the same period of 2023, a 66% improvement[184]. - Interest income decreased to $2.9 million for the three months ended September 30, 2024, down 42% from $5.0 million in the same period of 2023[195]. - Interest expense increased to $12.5 million for the three months ended September 30, 2024, up 71% from $7.3 million in the same period of 2023[196]. - Interest income decreased to $9.4 million for the nine months ended September 30, 2024, down from $16.4 million in 2023, a decline of 43%[209]. - Interest expense increased to $28.9 million for the nine months ended September 30, 2024, compared to $22.2 million in 2023, an increase of 30%[210]. Expenses - Research and development expenses are expected to rise as product candidate development programs progress, although specific program costs have not been tracked historically[177]. - Research and development expenses increased by 12% to $88.6 million for the three months ended September 30, 2024, compared to $79.4 million in the same period of 2023[189]. - Research and development expenses decreased by $33.9 million to $251.2 million for the nine months ended September 30, 2024, a decline of 12% from $285.1 million in 2023[204]. - Selling, general and administrative expenses decreased by 16% to $122.0 million for the three months ended September 30, 2024, from $145.6 million in the same period of 2023[193]. - Selling, general and administrative expenses increased by $20.5 million to $379.6 million for the nine months ended September 30, 2024, reflecting a 6% increase from $359.1 million in 2023[207]. - The company anticipates an increase in selling, general, and administrative expenses to support ongoing commercial activities and potential product commercialization[180]. Financing and Cash Flow - The Sixth Street Financing Agreement provides for a senior secured term loan facility of up to $475.0 million, with an initial draw of $375.0 million[144]. - The net proceeds from the initial draw of the Credit Facility were approximately $358.2 million, net of $16.8 million of issuance costs[146]. - The company has financed operations primarily through approximately $2.6 billion in net proceeds from public and private offerings, $392.0 million in payments and royalties from Sobi, and $532.5 million under various credit arrangements[140]. - Net cash used in operating activities was $107.2 million for the nine months ended September 30, 2024, compared to $496.9 million in 2023, indicating a significant reduction in cash outflow[219][220]. - Net cash used in operating activities for the nine months ended September 30, 2024 was $(107.2) million, a significant improvement compared to $(496.9) million for the same period in 2023, reflecting a reduction of approximately 78%[222]. - Net cash used in investing activities during the nine months ended September 30, 2024 was $(0.4) million, down from $(0.7) million in the same period of 2023, indicating a decrease of about 43%[221]. - Net cash provided by financing activities was $153.2 million for the nine months ended September 30, 2024, compared to $398.4 million for the same period in 2023, representing a decline of approximately 62%[223]. - The company expects its current cash and cash equivalents of $396.9 million will be sufficient to fund projected operating expenses and capital expenditures for at least the next 12 months[225]. - As of September 30, 2024, the company had cash and cash equivalents of $396.9 million, primarily in money market funds and U.S. Government obligations[231]. Product Development - The VALIANT trial demonstrated a 68% reduction in proteinuria in C3G and IC-MPGN patients compared to placebo (p < 0.0001)[136]. - The company is developing additional product candidates, including APL-3007, a small interfering RNA in Phase 1 clinical trial, and an oral complement inhibitor in preclinical development[138]. - The company plans to submit a supplemental new drug application to the FDA in early 2025 for systemic pegcetacoplan[137]. - The company is focusing on the ongoing development of systemic pegcetacoplan and prioritizing research initiatives on high potential opportunities[224]. - The company is investing substantial resources in the commercial infrastructure for SYFOVRE for GA and the development of product candidates[226]. - If cash generated from sales of EMPAVELI and SYFOVRE is insufficient, the company may need to seek external funding sources, including equity offerings or debt financings[228]. - The company may need to delay or limit product development if it cannot generate sufficient funds from sales or raise additional capital[229]. Inventory and Assets - The remaining pre-FDA approved inventory as of September 30, 2024, was valued at $15.4 million, primarily consisting of raw materials[188]. - As of September 30, 2024, the remaining pre-FDA approved inventory was valued at $15.4 million, primarily consisting of raw materials[203]. - As of September 30, 2024, the company held Convertible Notes in principal amount of $425.4 million, which had not been canceled[165]. - The company has not called for redemption of any Convertible Notes as of September 30, 2024[160]. - The conditional conversion feature of the Convertible Notes was not triggered as of September 30, 2024, meaning they are not convertible during the quarter ending December 31, 2024[165]. Market and Economic Factors - An immediate 10% change in interest rates would not materially affect the fair market value of the company's investment portfolio due to its short-term duration and low risk profile[231].