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Apellis Pharmaceuticals, Inc.

APLS
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Business Summary

Apellis Pharmaceuticals, Inc. is a commercial-stage biopharmaceutical company focused on discovering, developing, and commercializing novel therapeutic compounds by inhibiting the complement system. The company currently markets two drugs targeting C3: SYFOVRE (pegcetacoplan injection), approved by the FDA in February 2023 for geographic atrophy (GA) secondary to age-related macular degeneration, and EMPAVELI (pegcetacoplan), approved by the FDA in May 2021 for paroxysmal nocturnal hemoglobinuria (PNH) and in July 2025 for C3 glomerulopathy (C3G) and primary immune complex membranoproliferative glomerulonephritis (primary IC-MPGN) . Apellis believes SYFOVRE has the potential to be the standard of care for GA, a disease affecting an estimated 1.5 million people in the United States . The company has exclusive worldwide commercialization rights for SYFOVRE, with a focus on the U.S. and select international markets like Australia, where it received marketing approval in January 2025 . For EMPAVELI, Apellis holds exclusive U.S. commercialization rights, while Swedish Orphan Biovitrum AB (Publ) (Sobi) holds exclusive ex-U.S. commercialization rights for systemic pegcetacoplan .

The core business model revolves around the discovery, development, and commercialization of complement system inhibitors. Revenue is generated primarily through product sales of SYFOVRE and EMPAVELI, as well as royalties from collaboration partners like Sobi. Primary customer segments include patients with rare diseases such as PNH, C3G, primary IC-MPGN, and GA. The company leverages its expertise in complement immunology to develop new pipeline candidates, either as independent treatments or as supplements to pegcetacoplan's effects .

SYFOVRE (pegcetacoplan injection) is commercialized as a monotherapy for GA. GA is an advanced stage of age-related macular degeneration, characterized by progressive loss of retinal cells, leading to irreversible vision loss. An estimated 1.5 million people in the United States are living with GA . SYFOVRE aims to prevent or reduce retinal cell death by inhibiting complement activation at the C3 level, with increasing treatment effects observed over time in Phase 3 trials . It is administered intravitreally, with dosing flexibility of once every 25 to 60 days . For the years ended December 31, 2025 and 2024, SYFOVRE generated $586.9 million and $611.9 million, respectively, in U.S. net product revenue .

EMPAVELI (pegcetacoplan) is approved for PNH, C3G, and primary IC-MPGN. PNH is a rare, chronic blood disorder affecting approximately 4,700 patients in the United States . EMPAVELI targets C3 to address both intravascular and extravascular hemolysis in PNH. For C3G and primary IC-MPGN, rare kidney diseases affecting an estimated 5,000 people in the United States, EMPAVELI is designed to prevent C3 activation and protect the kidney from injury . For the years ended December 31, 2025 and 2024, EMPAVELI generated $102.4 million and $98.1 million, respectively, in U.S. net product revenue . Royalties from Sobi for ex-U.S. sales of Aspaveli were $13.2 million and $18.4 million for the years ended December 31, 2025 and 2024, respectively .

For the fiscal year ended December 31, 2025, Apellis Pharmaceuticals, Inc. reported total revenue of $702.5 million . The company achieved a net income of $22.4 million , a significant improvement from net losses of $197.9 million in 2024 and $528.6 million in 2023 . The accumulated deficit as of December 31, 2025, was $3.0 billion . Cash and cash equivalents stood at $466.2 million . The company generated net cash from operating activities of $45.3 million in 2025, compared to net cash usage of $87.9 million in 2024 and $594.7 million in 2023 . Total debt as of December 31, 2025, included $375.0 million under the Sixth Street Financing Agreement and approximately $93.9 million principal amount of Convertible Notes .

Year-over-year, U.S. net product revenue from SYFOVRE decreased from $611.9 million in 2024 to $586.9 million in 2025 . Conversely, U.S. net product revenue from EMPAVELI increased from $98.1 million in 2024 to $102.4 million in 2025 . Royalties from Sobi decreased from $18.4 million in 2024 to $13.2 million in 2025 . The shift from a net loss in 2024 to net income in 2025 indicates a positive inflection point in the company's financial performance, driven by revenue generation and potentially controlled expenses.

Significant operational developments during the period include the FDA approval of EMPAVELI for C3G and primary IC-MPGN in July 2025 . In January 2025, the TGA in Australia approved SYFOVRE for every-other-month treatment of adult patients with GA . The company initiated a Phase 2 multi-dose clinical trial of a combination therapy of SYFOVRE with APL-3007 (a small interfering RNA) in patients with GA in June 2025 . Two pivotal clinical trials with EMPAVELI were initiated in the fourth quarter of 2025 for primary focal segmental glomerulosclerosis (FSGS) and delayed graft function (DGF) . In July 2025, Apellis entered into a Royalty Buy-Down Agreement with Sobi, receiving an upfront payment of $275.0 million and agreeing to reduce Sobi's royalty payment obligations by 90% . In August 2025, Apellis opted into a license agreement with Beam Therapeutics for APL-9099, an FcRn gene editing treatment, triggering an upfront milestone payment of $3.8 million . The company also launched a single package for SYFOVRE (co-pack) in the fourth quarter of 2025 to standardize administration and streamline distribution .

Business Outlook

Apellis Pharmaceuticals, Inc. aims to transform the treatment of GA with SYFOVRE, maximize EMPAVELI's impact in rare diseases, and advance its innovative pipeline by leveraging its complement expertise in 2026 . The company anticipates achieving net operating income based on its current operating plan, though it notes that profitability may not be sustained .

A major growth area is the development of a next-generation treatment for GA by combining SYFOVRE with APL-3007, a small interfering RNA (siRNA) designed to comprehensively block complement activity in the retina and choroid . A Phase 2 multi-dose clinical trial of this combination in patients with GA was initiated in June 2025 to evaluate safety, biologic activity, and pharmacodynamics . The company believes that with less C3 present in the eye following APL-3007 administration, there may be a greater degree of efficacy contribution from SYFOVRE .

Another significant growth vector is the expansion of EMPAVELI's indications in nephrology. Two pivotal clinical trials with EMPAVELI were initiated in the fourth quarter of 2025 for primary focal segmental glomerulosclerosis (FSGS) and delayed graft function (DGF) . FSGS is a rare kidney disease affecting an estimated 13,000 primary FSGS patients in the United States, with approximately half suffering end-stage kidney disease within 5-10 years . DGF is a complication in kidney transplantation, occurring in 30-35% of the estimated 21,000 U.S. deceased donor kidney transplants in 2023 . There are currently no FDA-approved therapies for either FSGS or DGF, presenting a significant unmet medical need . The FSGS study (APL2-FSG-319) is a sequential Phase 2/3 trial evaluating efficacy and safety of twice-weekly subcutaneous infusions of pegcetacoplan, with a primary objective of reducing proteinuria . The DGF study (APL2-DGF-318) is a randomized, double-blind, placebo-controlled trial with a primary endpoint of time to freedom from dialysis to Day 90 .

The company is also advancing its innovative pipeline through its collaboration with Beam Therapeutics, Inc. for APL-9099, a treatment targeting the neonatal Fc receptor (FcRn) . Preclinical studies for APL-9099 have commenced, with the potential for a first-in-class gene editing treatment offering one-time dosing for future target indications . In August 2025, Apellis opted into a license agreement with Beam for the FcRn program in the liver, triggering an upfront milestone payment of $3.8 million . Under this agreement, Beam is eligible to receive up to $168.8 million in regulatory and development milestones and up to $215.0 million in sales-based milestones, along with low single-digit royalties on annual net sales .

Regarding operational outlook, the company plans to submit for regulatory approval of a single dose, sterilized prefilled syringe for SYFOVRE in the first half of 2026, which is expected to provide physicians with a new, more convenient administration method . The company continuously reviews its supply chain risk and implements mitigation plans .

Planned capital allocation includes continued significant expenses for commercializing EMPAVELI and SYFOVRE, prioritizing ongoing development of pegcetacoplan, and focusing research initiatives on high-potential opportunities like APL-3007 and APL-9099 . The company believes its cash and cash equivalents of $466.2 million as of December 31, 2025, combined with anticipated cash from product sales, will be sufficient to fund projected operating expenses and capital expenditures for at least the next 12 months, as well as longer-term cash requirements .

Management explicitly flagged structural headwinds and execution risks, including the potential for SYFOVRE to be less effective or cause safety issues not identified in clinical trials, such as the reported retinal vasculitis events . A change in the perception of SYFOVRE's benefit/risk profile could reduce market acceptance and adversely affect product revenues . The company also faces substantial competition in GA from avacincaptad pegol and in PNH from eculizumab, ravulizumab, and iptacopan, with iptacopan also competing in C3G . The regulatory approval process is expensive, time-consuming, and uncertain, with no guarantee of obtaining approvals for SYFOVRE in additional jurisdictions or for EMPAVELI in other indications . The European Commission's negative opinion on SYFOVRE's MAA in the EU in 2024 is noted as potentially impacting approval prospects in other jurisdictions . Furthermore, the company relies on third parties for manufacturing, storage, and distribution, increasing the risk of insufficient quantities or unacceptable costs .

Geographic, regulatory, and macro factors identified as constraints include the uncertainty surrounding the FDA's draft Diversity Action Plan (DAP) guidance and how it will consider DAPs in connection with NDA reviews . The EU's new Clinical Trials Regulation (EU) No 536/2014, effective January 2022, could delay clinical studies in the EU if not navigated properly . The ongoing review of EU pharmaceutical legislation, with proposed changes potentially reducing regulatory exclusivity protection, is expected to be adopted by mid-2026 and take effect in mid-2028 . The U.S. Inflation Reduction Act of 2022 (IRA) has implications for Medicare Part D, including price negotiations for certain costly single-source drugs starting in 2026, which could subject Apellis's products to maximum fair price negotiations and impact profitability . The Trump Administration's Executive Orders and proposed pilot programs like GLOBE and GUARD, aiming to reduce pharmaceutical prices and implement reference pricing, also introduce significant uncertainty and potential adverse effects on business .

Risk Factors

Apellis faces material risks including the potential for SYFOVRE or EMPAVELI to be less effective or cause safety issues not identified in clinical trials, such as the reported retinal vasculitis events with SYFOVRE, which could compromise market acceptance and reduce product revenues . The company faces substantial competition in GA from avacincaptad pegol and in PNH from eculizumab, ravulizumab, and iptacopan, with iptacopan also competing in C3G . The regulatory approval process is expensive, time-consuming, and uncertain, with the European Commission's negative opinion on SYFOVRE's MAA in the EU in 2024 potentially impacting approval prospects in other jurisdictions . Dependence on third parties for manufacturing, storage, and distribution increases the risk of supply interruptions or unacceptable costs . Macroeconomic and geopolitical risks include the uncertainty surrounding the FDA's draft Diversity Action Plan (DAP) guidance, the EU's new Clinical Trials Regulation, and the ongoing review of EU pharmaceutical legislation, which could reduce regulatory exclusivity . The U.S. Inflation Reduction Act of 2022 (IRA) and Trump Administration's Executive Orders and proposed pilot programs (GLOBE and GUARD) aiming to reduce pharmaceutical prices and implement reference pricing, could subject Apellis's products to Medicare price negotiations and impact profitability . The company also carries $375.0 million of indebtedness under its financing agreement with Sixth Street and approximately $93.9 million principal amount of Convertible Notes maturing in September 2026 , with covenants including maintaining liquidity of at least $50.0 million if market capitalization is below $3.0 billion .

Management Priorities

Management's message to shareholders emphasizes a continued focus on compassion and commitment to patients, aiming to transform the treatment of GA with SYFOVRE, maximize EMPAVELI's impact in rare diseases, and advance an innovative pipeline leveraging complement expertise in 2026 . They explicitly state the anticipation of achieving net operating income based on the current operating plan, while cautioning that profitability may not be sustained . Key strategic priorities include the ongoing commercialization of EMPAVELI and SYFOVRE, prioritizing the ongoing development of pegcetacoplan, and focusing research initiatives on high potential opportunities such as APL-3007 and APL-9099 . Management believes that the cash and cash equivalents of $466.2 million as of December 31, 2025, combined with anticipated cash from sales of EMPAVELI and SYFOVRE, will be sufficient to fund projected operating expenses and capital expenditure requirements for at least the next 12 months, as well as anticipated longer-term cash requirements and obligations .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Overview
  2. [2] Item 1, Business — Overview
  3. [3] Item 1, Business — Overview
  4. [4] Item 1, Business — Overview
  5. [5] Item 1, Business — Our Strategy
  6. [6] Item 1, Business — Geographic Atrophy
  7. [7] Item 1, Business — Benefits of Our Approach
  8. [8] Item 1, Business — Benefits of Our Approach
  9. [9] Item 1, Business — Overview
  10. [10] Item 1, Business — Paroxysmal Nocturnal Hemoglobinuria (PNH)
  11. [11] Item 1, Business — EMPAVELI in Nephrology
  12. [12] Item 1, Business — Overview
  13. [13] Item 1, Business — Overview
  14. [14] Item 7, MD&A — Consolidated Results
  15. [15] Item 1A, Risk Factors — Risks Related to Our Financial Position and Need for Additional Capital
  16. [16] Item 1A, Risk Factors — Risks Related to Our Financial Position and Need for Additional Capital
  17. [17] Item 1A, Risk Factors — Risks Related to Our Financial Position and Need for Additional Capital
  18. [18] Item 1A, Risk Factors — Risks Related to Our Financial Position and Need for Additional Capital
  19. [19] Item 1A, Risk Factors — Risks Related to Our Financial Position and Need for Additional Capital
  20. [20] Item 1A, Risk Factors — Risks Related to Our Financial Position and Need for Additional Capital
  21. [21] Item 1, Business — Overview
  22. [22] Item 1, Business — Overview
  23. [23] Item 1, Business — Overview
  24. [24] Item 1, Business — Overview
  25. [25] Item 1, Business — Overview
  26. [26] Item 1, Business — Overview
  27. [27] Item 1, Business — Overview
  28. [28] Item 1, Business — Overview
  29. [29] Item 1, Business — Research Collaboration with Beam
  30. [30] Item 1, Business — Product Development
  31. [31] Item 1, Business — Our Strategy
  32. [32] Item 1A, Risk Factors — Risks Related to Our Financial Position and Need for Additional Capital
  33. [33] Item 1, Business — SYFOVRE and APL-3007
  34. [34] Item 1, Business — SYFOVRE and APL-3007
  35. [35] Item 1, Business — SYFOVRE and APL-3007
  36. [36] Item 1, Business — Overview
  37. [37] Item 1, Business — EMPAVELI in Nephrology
  38. [38] Item 1, Business — EMPAVELI in Nephrology
  39. [39] Item 1, Business — EMPAVELI in Nephrology
  40. [40] Item 1, Business — EMPAVELI in FSGS
  41. [41] Item 1, Business — EMPAVELI in DGF
  42. [42] Item 1, Business — Overview
  43. [43] Item 1, Business — Overview
  44. [44] Item 1, Business — Research Collaboration with Beam
  45. [45] Item 1, Business — Research Collaboration with Beam
  46. [46] Item 1, Business — Product Development
  47. [47] Item 1, Business — Manufacturing
  48. [48] Item 1A, Risk Factors — Risks Related to Our Financial Position and Need for Additional Capital
  49. [49] Item 1A, Risk Factors — Risks Related to Our Financial Position and Need for Additional Capital
  50. [50] Item 1A, Risk Factors — Risks Related to Commercialization and Product Development
  51. [51] Item 1A, Risk Factors — Risks Related to Commercialization and Product Development
  52. [52] Item 1A, Risk Factors — Risks Related to Commercialization and Product Development
  53. [53] Item 1A, Risk Factors — Risks Related to Regulatory Approval and Marketing of Our Product Candidates and Other Legal Compliance Matters
  54. [54] Item 1A, Risk Factors — Risks Related to Regulatory Approval and Marketing of Our Product Candidates and Other Legal Compliance Matters
  55. [55] Item 1A, Risk Factors — Risks Related to Our Dependence on Third Parties
  56. [56] Item 1A, Risk Factors — Risks Related to Regulatory Approval and Marketing of Our Product Candidates and Other Legal Compliance Matters
  57. [57] Item 1A, Risk Factors — Risks Related to Regulatory Approval and Marketing of Our Product Candidates and Other Legal Compliance Matters
  58. [58] Item 1A, Risk Factors — Risks Related to Regulatory Approval and Marketing of Our Product Candidates and Other Legal Compliance Matters
  59. [59] Item 1A, Risk Factors — Current and future legislation may increase the difficulty and cost for us and our collaborators to obtain reimbursement of and commercialize our product candidates and affect the prices we, or they, may obtain.
  60. [60] Item 1A, Risk Factors — Current and future legislation may increase the difficulty and cost for us and our collaborators to obtain reimbursement of and commercialize our product candidates and affect the prices we, or they, may obtain.
  61. [61] Item 1A, Risk Factors — We or others may later discover that EMPAVELI or SYFOVRE is less effective than previously believed or causes safety issues that were not identified in clinical trials, which could compromise our ability, or that of our collaborators, to market the product.
  62. [62] Item 1A, Risk Factors — We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.
  63. [63] Item 1A, Risk Factors — The regulatory approval process is expensive, time consuming and uncertain and may prevent us or our collaborators such as Sobi from obtaining approvals for the commercialization of pegcetacoplan or any of our product candidates that we develop.
  64. [64] Item 1A, Risk Factors — We contract with third parties for the manufacture, storage and distribution of commercial supply for EMPAVELI, SYFOVRE, and clinical supply for our product candidates and expect to continue to do so in connection with our future development and commercialization efforts.
  65. [65] Item 1A, Risk Factors — The regulatory approval process is expensive, time consuming and uncertain and may prevent us or our collaborators such as Sobi from obtaining approvals for the commercialization of pegcetacoplan or any of our product candidates that we develop.
  66. [66] Item 1A, Risk Factors — Current and future legislation may increase the difficulty and cost for us and our collaborators to obtain reimbursement of and commercialize our product candidates and affect the prices we, or they, may obtain.
  67. [67] Item 1A, Risk Factors — The terms of our indebtedness could adversely affect our operations and limit our ability to plan for or respond to changes in our business.
  68. [68] Item 1A, Risk Factors — The terms of our indebtedness could adversely affect our operations and limit our ability to plan for or respond to changes in our business.
  69. [69] Item 1, Business — Our Strategy
  70. [70] Item 1A, Risk Factors — Risks Related to Our Financial Position and Need for Additional Capital
  71. [71] Item 1A, Risk Factors — Risks Related to Our Financial Position and Need for Additional Capital
  72. [72] Item 1A, Risk Factors — Risks Related to Our Financial Position and Need for Additional Capital

Analysis on 5/22/2026