With its first FDA approval in hand for a complement inhibitor designed to treat paroxysmal nocturnal hemoglobinuria (PNH), Apellis Pharmaceuticals has thrown down the gauntlet this week by launching its commercial challenge to longtime PNH leader Alexion Pharmaceuticals, whose two blockbusters dominate the space.
Apellis’ longtime lead candidate Empaveli™ (pegcetacoplan) became its first marketed product on May 14 after the FDA authorized the drug as the first and only targeted C3 therapy indicated to treat adults with PNH, a rare blood disease characterized by destruction of red blood cells, blood clots, and impaired bone marrow function. The first Empaveli shipment was fulfilled on Tuesday.
“Our objective has always been, and continues to be, to elevate the standard of care in this disease,” Cedric Francois, MD, PhD, Apellis’ co-founder and CEO/President, told GEN Edge.
Empaveli elevates the PNH standard of care, Francois said, by targeting complement factor C3, the central protein in the complement cascade, rather than the C5 protein further downstream in the complement, which is targeted by Alexion’s two blockbuster PNH drugs, Soliris® (eculizumab) and its next-generation version Ultomiris® (ravulizumab-cwvz).
Empaveli is a synthetic cyclic peptide conjugated to a polyethylene glycol (PEG) polymer that binds specifically to C3 and C3b. According to Apellis, Empaveli is designed to inhibit complement at the levels of C3, thus blocking all downstream effector pathways of the complement cascade. By acting proximally in the complement cascade, Empaveli controls both C3b-mediated extravascular hemolysis and terminal complement-mediated intravascular hemolysis.
Apellis has trumpeted Empaveli’s success in the Phase III PEGASUS trial (NCT03500549), an 80-patient study designed to compare the drug head-to-head with Soliris. Data from PEGASUS published March 18 in The New England Journal of Medicine showed that Empaveli met the trial’s primary endpoint by showing superiority to Soliris on the change from baseline in hemoglobin level at Week 16, with a statistically significant adjusted mean increase of 3.84 g/dL.
“Overall, we believe Empaveli is well-positioned to improve the standard-of-care in poor-responding PNH patients, representing a meaningful market,” Colleen M. Kusy, CFA, research associate with Baird, wrote May 18 in a research note.
Investors initially agreed with that assessment, having responded to Apellis’ FDA approval—announced after the close of trading May 14—with a buying surge that sent Apellis’ stock price jumping 20% the following trading day, to $53 on Monday from $44.26. Since then, however, shares have slid 8% to $48.95 at the close Thursday.
Should patients and their doctors agree with Kusy, Empaveli could dent the sizeable sales juggernaut Alexion has generated with its PNH blockbusters. Alexion has vowed to maintain that advantage, including the phase “LEAD and EXPAND in complement” in its April 30 investor presentation of first quarter results.
Soliris, which was launched in 2007, generated $4.06 billion in net product sales last year, while Ultomiris, introduced in 2019, finished 2020 with $1.08 billion. Both drugs continued their sales growth during the first quarter of this year, with Soliris racking up $1.64 billion, up 13% from Q1 2020, and Ultomiris $346.9 million, up 56% from the year-ago quarter.
Francois said Apellis won’t say yet how much it expects to generate this year in sales of Empaveli.
However, “ONeil Trader,” a self-described former stockbroker turned independent analyst/writer who is founder and editor of the online Growth Stock Forum, commented in Seeking Alpha: “I believe Empaveli will be able to capture 25–30% global market share which is mainly based on the opportunity in poor C5 responders.
“This translates to $400–500 million in annual global sales,” ONeil Trader predicted.
One potential advantage Empaveli is offering patients is price. At an annual list price of $458,000 per patient, Empaveli is the same price as Ultomiris, and 9% cheaper than Soliris’ list price of about $500,000 per patient per year.
“In our opinion, this price reflects the value of Empaveli in PNH while still providing savings to the healthcare system in terms of avoidance of infusion and transfusion costs, etc.,” Kusy added.
Francois added, however, that Apellis will ensure Empaveli’s affordability to patients through its ApellisAssist™ patient-access program. The program is designed to provide financial assistance for eligible patients, as well as services and resources that include insurance support, education, and training.
Sales for Empaveli could grow further with additional regulatory approvals. The European Medicines Agency is reviewing Apellis’ marketing authorization application (MAA) for Empaveli in PNH: “We are expecting and hoping for an approval in the second half of this year,” Francois said.
Swedish Orphan Biovitrum (Sobi) holds global co-development and outside-U.S. commercialization rights to Empaveli through an up-to-$1.245 billion collaboration launched in October 2020 with Apellis, which retains U.S. rights.
Piling up indications
Empaveli’s future sales will hinge on how well Apellis can emulate Alexion’s success in piling up regulatory approvals for indications beyond PNH.
Since winning approval in PNH, Alexion has maintained blockbuster status for Soliris and Ultomiris through authorizations for additional indications. Both drugs are also indicated for atypical hemolytic uremic syndrome (aHUS) in most patients, while Soliris is also approved for generalized myasthenia gravis (gMG) in adults who are anti-acetylcholine receptor (AchR) antibody positive, and neuromyelitis optica spectrum disorder (NMOSD) in adults who are anti-aquaporin-4 (AQP4) antibody positive.
Alexion is also developing Soliris for Guillain-Barre syndrome, for which it is in a Phase III trial (NCT04752566) in Japan that began in February. Ultimoris is in Phase III trials in gMG (NCT03920293), NMOSD (NCT04201262), Hematopoietic Stem Cell Transplant-Associated Thrombotic Microangiopathy (HSCT‑TMA; NCT04557735), and amyotrophic lateral sclerosis (ALS, NCT04248465)—as well as a Phase III study for a weekly subcutaneous formulation, with Alexion planning to file for U.S. approval of that formulation plus device combination in the third quarter, followed in Q1 2022 with a European filing.
Later this quarter, Alexion plans to launch a Phase III trial of Ultomiris in Complement Mediated Thrombotic Microangiopathy (CM-TMA), while a Phase II/II study in dermatomyositis is set to start in the second half of this year, pending regulatory feedback.
Alexion envisions 2023 launches for Ultomiris in ALS, HSCT-TMA, and CM-TMA—all projected to add a combined $1-4 billion in sales for the drug. That same year, Alexion plans to launch Soliris for Guillain-Barre syndrome, but is projecting under $100 million in additional sales.
Also in Alexion’s pipeline is another anti-C5 candidate, ALXN1720, an albumin-binding bispecific minibody for gMG and dermatomyositis. A Phase I healthy volunteer study was paused due to COVID-19 but is set to resume in the second quarter with data to be released in 2H 2021.
Likewise, Apellis envisions PNH as the first of numerous indications for Empaveli. The drug is under development as systemic pegcetacoplan (APL-2) in three additional disorders for which pivotal trials are set to start, and a fourth disorder for which a clinical study is in progress:
- Cold agglutinin disease (CAD), for which Sobi plans to oversee a Phase III trial.
- The combination of immune complex membranoproliferative glomerulonephritis (IC-MPGN) and C3 glomerulopathy (C3G), for which Apellis will oversee a Phase III trial.
- HSCT-TMA, for which Sobi plans to begin a potentially registrational Phase II trial.
- ALS, the subject of the 228-patient Phase II MERIDIAN trial (NCT04579666), which began dosing in November 2020, with an estimated primary completion date of September 2022.
Development in ALS is especially daunting since, Francois acknowledged, since the neurological disorder also known as Lou Gehrig’s disease has seen years of clinical setbacks. A 2017 review article tallied more than 60 ALS drug candidates reaching clinical trials, and mostly failing, in the 20 years following the 1995 U.S. approval of riluzole.
“ALS is a disease, where we believe that mechanistically, Empaveli may be beneficial to patients,” Francois said. “This is a commitment by the company to say, ‘Look, even though this is high-risk it’s something that we want to do.’ Hopefully we’ll see the results next year.”
Seeing opportunity in GA
An intravitreal form of pegcetacoplan is in Phase II and III trials for geographic atrophy (GA), a program for which Apellis retains worldwide commercialization rights under its partnership with Sobi. In April, Apellis released 24-month data from the Phase Ib APL2-103 trial (NCT03777332) showing a 46% decrease in the growth rate of GA lesions in the treated eye compared to the untreated eye in eight patients with bilateral GA.
Data from two Phase III trials that have enrolled a combined 1,256 patients, DERBY (NCT03525600) and OAKS (NCT03525613), is set to be released in the third quarter. Should the data prove positive, Apellis could pursue the first approval for a therapy to treat GA, an advanced form of age-related macular degeneration (AMD) that is estimated to afflict 5 million people worldwide, including about 973,000 Americans, according to a 2017 study citing earlier studies published in 2004 and in 2014.
“Now we are talking about something very, very different from a rare disease. It’s a specialty, something that would typically be very difficult to embrace for a company like Apellis and is much more kind-of large pharma territory,” Francois said.
Physicians who specialize in treating retinal disorders, Francois added, “is a very small segment of specialists that we can really target and where we believe that if we are successful, we can make a big, big difference for patients with the advanced form of geographic atrophy which is arguably the largest contributor of patients to the retinal practice and for which today, there is absolutely nothing that can be offered to these patients. It’s a unique opportunity for these patients and their physicians and nurses.”
The only drug in Apellis’ pipeline not based on pegcetacoplan is an intravenous form of APL-9, a C3-targeting complement cascade inhibitor being developed for control of host attack on AAVs for gene therapy. In March, Apellis halted development of APL-9 in severe COVID-19, after an interim review of data from a Phase I/II trial (NCT04402060) found no meaningful mortality reduction in patients treated with APL-9 plus standard of care, compared to standard of care alone.
Alexion has also struggled in COVID-19. In January, it paused its Phase III trial (NCT04369469) assessing Ultomiris in adults hospitalized with severe COVID-19 requiring mechanical ventilation, citing a lack of efficacy, pending further data analysis. However, Alexion continues to provide Ultomiris for the ongoing Phase IV TACTIC-R platform study (NCT04390464) led by Cambridge University Hospitals NHS Foundation Trust, designed to assess the drug’s potential for preventing progression of the virus in hospitalized patients not requiring mechanical ventilation.
Apellis was established in 2009 as a spinout of Potentia Pharmaceuticals, launched six years earlier in Louisville, KY, by Francois and two partners—Pascal Deschatelets, PhD, now the company’s chief scientific officer; and their mutual friend Paul K. Olson, PhD (1967-2018)—to commercialize APL-1 (also called POT-4), a derivative of compstatin, a cyclic peptide first identified by the lab of John D. Lambris, PhD, the Dr. Ralph and Sallie Weaver Professor of Research Medicine at the University of Pennsylvania’s Perelman School of Medicine.
“Pascal and I sat down at the time and we said, ‘Let’s try to do something bold and difficult, but something that we believed was going to be very important for patients with several diseases,’ Francois recalled. “That was to control this ancient part of our immune system, complements, in the whole body.
To do that, Francois said, Apellis had to find a molecular entity that could put an enzymatic cascade that can be out of control under control.
“With antibodies it’s really hard to do—impossible, actually, because of the sheer quantity of complement C3 that we have in the body. So we actually discovered a way of doing that, where we use an enzymatic approach to an enzymatic system. By doing that, we found a way of effectively and efficiently controlling compliment in diseases like PNH.”
How did Francois and Deschatelets come to embrace a complement-based therapy approach?
“I would love to tell you that we were super smart but that’s not really what happened,” Francois acknowledged. “We were fascinated with macrophages and the role that they play in chronic inflammatory diseases. At the time—2003, ’04, ’05—it was becoming clear that macrophages were much more plastic and could move between different phenotypes more that was previously believed. So, we wanted to manipulate macrophage phenotypes and macrophage behavior in the context of drug therapeutic approaches.”
The two researchers were initially stumped about how to do so until one day when they walked through a corridor at the University of Louisville, where Francois received his PhD in physiology and Deschatelets was an adjunct professor of physiology and biophysics. They saw a poster presentation on complements.
Googling complement inhibitors
“We looked at each other and we literally both had the same idea: This would be a great way of controlling that macrophage behavior that we are looking for,” Francois said. “We started Googling compliment inhibitors, and that was the start of our journey.”
Apellis was created to develop complement therapies for non-ocular diseases starting with APL-2, a form of APL-1 with a longer clearance half-life in the body. Potentia licensed its ocular program to Alcon in 2009 for an undisclosed amount, in a deal that allowed Alcon to acquire Potentia based on achieving milestones and interest in developing APL-1/POT-4.
Instead, Alcon was gradually acquired over three years by Novartis from Nestle, through deals totaling about $52 billion that were completed in 2011. Alcon’s partnership with Potentia ended in 2013, when Potentia inked an agreement with Apellis to develop complement inhibitors for ocular diseases.
A year later, Apellis agreed to acquire Potentia for an undisclosed price. The deal, completed in 2015, included Potentia’s intellectual property rights to APL-2, which earlier that year received the FDA’s orphan drug designation for PNH.
Apellis built on that approval in 2016 when it obtained its first FDA fast track designation for PNH patients who required transfusions despite receiving therapy with Soliris. That was superseded in 2019 by a broader FDA fast track designation for APL-2 covering all patients with PNH.
To support clinical development and now commercialization of Empaveli, Apellis has grown its headcount—which Francois said has increased this year from the 374 it reported in a regulatory filing as of December 31, 2020, to about 430 today. He would not discuss how many additional employees Apellis plans to add.
Last year, eager to draw upon the talent and other resources of the nation’s top biopharma cluster as ranked by GEN, Apellis relocated from the Louisville suburb of Crestwood, KY, to Waltham, MA. The company has additional operations in Watertown, MA; San Francisco; Zug, Switzerland; Munich; and Kew East, Victoria, Australia.
As Apellis grows, Francois said, its plans will not hinge upon the future of Alexion, whose shareholders on May 11 approved a $39 billion acquisition of the company by AstraZeneca announced in December. The deal, set to close in the third quarter, has been driven by AstraZeneca’s intent to expand into drug development for rare diseases such as PNH, based on Alexion’s success.
The prospect of Alexion’s PNH drugs being part of AstraZeneca “will have no effect on us,” Francois declared.
“We have developed a drug that has shown superiority on hemoglobin levels in patients with pH that we believe offers an opportunity to elevate the standard of care,” Francois said, “and we are going to be fully focused on that element of our future.”