Apellis Pharmaceuticals said Tuesday it is eliminating 25% of its workforce—about 225 jobs—in a restructuring intended to refocus the company’s resources on Syfovre® (pegcetacoplan injection), its FDA-approved drug for geographic atrophy (GA) secondary to age-related macular degeneration (AMD), which has been the focus of safety questions in recent weeks.
Apellis expects to save up to $300 million through 2024 through the restructuring, which is also intended to drive growth in Apellis’ other FDA-approved drug, Empaveli® (pegcetacoplan), a complement inhibitor which became Apellis’ first marketed product in 2021.
“We are taking important actions to strengthen our ability to invest in growth opportunities and support the company’s long-term success, including maximizing the significant opportunity with Syfovre,” Cedric Francois, MD, PhD, Apellis’ co-founder and CEO, said in a statement. “As a more focused organization, we believe these initiatives put Apellis in a stronger position to create value for shareholders and continue delivering on our mission for patients now and in the future.”
“These were difficult, but necessary, decisions,” Francois added.
Apellis said its field-based commercial and medical employees would be “minimally affected,” and that the job cuts will be “substantially” completed in the third quarter. Those reductions are projected to generate $70 million of the projected net cost savings, with the other $230 million to come from eliminating planned external expenses. Apellis expects to incur one-time costs related to the workforce reduction of approximately $9 million to $11 million, primarily in the second half of 2023.
Apellis is gearing up to launch Syfovre outside the United States, and is anticipating a regulatory approval decision from the European Medicines Agency (EMA) in early 2024. If approved in Europe, Apellis said, it will prioritize an initial EU launch in Germany. Marketing applications for the drug are also under review in Canada, Australia, the U.K., and Switzerland, with decisions expected in the first half of 2024.
During the first half of this year marketed solely in the United States, Syfovre generated $85.7 million in U.S. net product revenues—thanks in part to a marketing campaign highlighted by ads featuring Henry Winkler, Fonzie from the 1970s sitcom “Happy Days”.
Apellis said it delivered more than 50,000 vials to physician practices, including commercial vials shipped and sample vials distributed. More than 26,000 vials have been distributed in the third quarter.
However, Syfovre faces looming competition from Iveric Bio, a wholly-owned subsidiary of Astellas Pharma which on August 4 won FDA approval for its own drug indicated for GA secondary to AMD, a complement C5 inhibitor marketed as Izervay™ (avacincaptad pegol intravitreal solution).
Safety questions
The restructuring comes more than a month after Apellis began scrambling to address questions about the safety of Syfovre. Those questions first arose July 15, when the Research and Safety in Therapeutics (ReST) Committee of the American Society of Retinal Specialists flagged six cases of occlusive retinal vasculitis, a rare but severe type of inflammation of the retinal vessels, in patients treated with Apellis’ drug.
Last week, Apellis confirmed eight events of retinal vasculitis—five of them occlusive, the other three non-occlusive. As of August 22, when Apellis confirmed the eight cases, one patient remained stable at baseline vision. Two patients have recovered vision nearly back to baseline, two patients have severe vision impairment that the company acknowledged is unlikely to be resolved, and three patients’ outcomes were still pending.
Apellis has cited “internal structural variations” in the 19-gauge x 1½ inch filter needle included in some of its injection kits. While it has stopped short of saying those irregularities caused the retinal vasculitis events, Apellis is recommending that professionals who administer Syfovre instead use injection kits that have an 18-gauge filter needle. Apellis is now exclusively distributing injection kits with the 18-gauge filter needle, though in the past its kits included either 18- or 19-gauge needles.
The last confirmed event of retinal vasculitis occurred on June 20. Two of the patients were injected with Syfovre in April, three in May, and three in June.
The safety issue sent Apellis shares plunging 73% between July 15 and August 3, when shares closed at a low of $23.86. Since Apellis linked the eight retinal vasculitis cases to a needle and not Syfovre itself on August 22, the company’s share has bounced back 32%, from $30.76 to $40.65 Tuesday.
Focus on PNH
Apellis said it will reduce Empaveli-related expenses by focusing the drug’s commercial and medical development more on its now-approved indication of Paroxysmal Nocturnal Hemoglobinuria (PNH). Empaveli generated $42.7 million in U.S. net product revenues during the first half of this year, with more than 230 Americans on commercial treatment with the drug as of June 30, 2023.
The company plans to prioritize development of systemic pegcetacoplan in immune complex membranoproliferative glomerulonephritis (IC-MPGN) and C3 glomerulopathy (C3G), rare kidney diseases with no approved treatments. Apellis hopes to support that effort through positive data from the Phase III VALIANT trial (NCT05067127), expected to be released in 2024.
No new clinical development programs with systemic pegcetacoplan are being planned, Apellis added.
Apellis also committed itself to focusing its research on what it deems “high-potential” opportunities in retina and central nervous system (CNS) diseases, while deprioritizing two preclinical development programs that involve combinations of silent RNA with systemic pegcetacoplan, APL-1030 (undisclosed indication), and APL-2006 (geographic atrophy and wet age macular degeneration).
However, Apellis added, that it will continue its collaboration with Beam Therapeutics focused on applying base editing to discover new therapies for complement-driven diseases.
