Apellis(US:APLS)2026-02-24 11:56Revenue Generation - SYFOVRE generated U.S. net product revenue of $586.9 million and $611.9 million for the years ended December 31, 2025 and 2024, respectively[665]. - EMPAVELI generated U.S. net product revenue of $102.4 million and $98.1 million for the years ended December 31, 2025 and 2024, respectively, along with royalties of $13.2 million and $18.4 million from Sobi[666]. - Total revenue for the year ended December 31, 2025, was $1,003.8 million, an increase of 28% compared to $781.4 million in 2024[722]. - Product revenue decreased by 3% to $689.4 million in 2025 from $709.9 million in 2024, primarily due to increased rebates[723]. - Licensing and other revenue surged by 340% to $314.4 million in 2025, driven by a $275.0 million upfront payment related to a Royalty Agreement[724]. - Revenue is derived from product sales of EMPAVELI and SYFOVRE, and from the Sobi Collaboration Agreement[700]. Financial Performance - The company has an accumulated deficit of $3.0 billion as of December 31, 2025, with net losses of $197.9 million and $528.6 million for the years ended December 31, 2025 and 2023, respectively[672]. - Net income for 2025 was $22.4 million, a significant turnaround from a net loss of $197.9 million in 2024[722]. - Interest income rose by 3% to $13.1 million in 2025, attributed to increased money market funds[734]. - Interest expense increased by 10% to $44.3 million in 2025, primarily due to interest incurred under a new Credit Facility[735]. Expenses and Costs - The company expects to incur significant commercialization expenses related to EMPAVELI and SYFOVRE, as well as ongoing clinical trials for product candidates[673]. - Selling, general and administrative expenses are anticipated to rise to support ongoing research, commercialization of products, and public company operations[712]. - Research and development expenses decreased by 10% to $295.9 million in 2025 from $327.6 million in 2024, mainly due to reduced program-specific external costs[728]. - Selling, general and administrative expenses increased by $49.2 million, primarily due to $34.0 million in contributions to patient assistance organizations[732]. - The company incurred royalty expenses of $19.1 million, $19.8 million, and $8.9 million on sales of SYFOVRE for the years ended December 31, 2025, 2024, and 2023, respectively[760]. Financing and Capital Structure - The Sixth Street Financing Agreement provides a senior secured term loan facility of up to $475.0 million, with an initial draw of $375.0 million[675]. - The company has financed operations through $2.6 billion in net proceeds from public offerings and $414.7 million in payments and royalties from Sobi[671]. - As of December 31, 2025, the company held Convertible Notes in principal amount of $425.4 million, classified as current liabilities[694]. - The company entered into capped call transactions to reduce potential dilution from Convertible Notes, with a strike price initially set at $39.4625[695]. - Cash proceeds of $98.8 million were received from unwinding a portion of the capped call transactions on February 27, 2024[696]. - The company has not called for redemption of any Convertible Notes as of December 31, 2025[692]. - The company entered into a sales agreement to offer and sell shares of common stock up to $300.0 million, with no sales made under this agreement during the year ended December 31, 2025[742]. - In February 2023, the company issued 4,007,936 shares and pre-funded warrants for 2,380,956 shares, generating total net proceeds of $384.4 million after deducting underwriting discounts and commissions of $18.8 million[743]. Cash Flow and Liquidity - For the year ended December 31, 2025, net cash provided by operating activities was $45.3 million, consisting of a net income of $22.4 million and adjustments for $108.1 million of non-cash items[746]. - The company reported a net cash used in operating activities of $87.9 million for the year ended December 31, 2024, primarily due to a net loss of $197.9 million[747]. - Net cash provided by financing activities was $8.9 million for the year ended December 31, 2025, mainly from proceeds of $5.5 million from stock options and $3.4 million from the employee stock purchase plan[749]. - The company expects its cash and cash equivalents as of December 31, 2025, along with anticipated sales from EMPAVELI and SYFOVRE, to be sufficient to fund projected operating expenses for at least the next 12 months[752]. - As of December 31, 2025, the company holds cash and cash equivalents of $466.2 million, primarily in money market funds and U.S. treasury securities[768]. Clinical Development and Collaboration - The company initiated a Phase 2 multi-dose clinical trial for a next-generation therapy combining SYFOVRE with APL-3007 in June 2025[665]. - The company is developing APL-9099, a first-in-class gene editing treatment, through collaboration with Beam Therapeutics[670]. - A Royalty Buy-Down Agreement with Sobi resulted in an upfront payment of $275.0 million and potential additional payments of up to $25.0 million upon EMA approval of Aspaveli[668]. - Sobi received EMA approval for Aspaveli in January 2026, triggering a $25.0 million milestone payment to the company[669]. - The company recognized $250.0 million in upfront payment from Sobi under the Collaboration Agreement, with potential milestone payments up to $915.0 million[697]. - The company earned a $50.0 million payment from Sobi in March 2022 related to the first regulatory milestone in Europe[699]. Risk Factors - The company's primary market risk exposure is interest rate sensitivity, which is affected by changes in U.S. interest rates[768]. - 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[768]. - 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[754]. - Significant contractual obligations as of December 31, 2025, total $746.7 million, including $553.7 million for the credit facility and $96.2 million for convertible notes[756]. - The company has non-cancelable purchase obligations totaling up to $69.1 million related to the manufacturing of drug substance and drug product, due by December 31, 2025[766]. - An expense of $6.4 million was incurred due to the termination of the minimum purchase obligation with NOF, included in cost of sales[766]. - Additional non-cancelable purchase agreements obligate the company to pay up to $6.7 million to vendors over the next three years[767].