- Apellis Pharmaceuticals executives on Tuesday defended the recent decision to add new data to the U.S. application for the company’s closely watched eye drug, delaying its regulatory review and potential launch.
- The Food and Drug Administration previously had a Nov. 26 deadline to decide whether to make pegcetacoplan the first marketed treatment for geographic atrophy. The review will now extend until late February because the fresh results — two years of follow-up from a pair of Phase 3 studies — constituted a “major amendment” to Apellis’ application.
- Apellis has lost more than a fifth of its value since disclosing the decision, which could shorten its advantage over a similar, rival drug from Iveric Bio that’s also being submitted to the FDA. But on a conference call with analysts, CEO Cedric Francois said the move will give Apellis the “best product profile at launch” at the cost of a short delay.
The review of pegcetacoplan is important to Apellis, its investors and drug development for geographic atrophy, a common and irreversible form of vision loss.
Wall Street analysts believe approval of pegcetacoplan in geographic atrophy could translate to billions of dollars in revenue for Apellis, whose only product, Empaveli, for a rare blood condition, competes with AstraZeneca’s Ultomiris for market share.
Still, Apellis is pioneering an approval path for a condition with no available treatments, a pursuit that comes with additional regulatory risk. And it’s aiming to do so with a drug proven to slow signs of disease progression — the rate of the growth of lesions in the eyes — but hasn’t shown those benefits translate to preserved or improved vision.
Apellis filed for approval in June based on one-year and 18-month results from the Phase 3 studies, and executives initially indicated they didn’t need to submit two-year findings to regulators. The change in plans last week “creates confusion and raises credibility questions,” Evercore ISI analyst Umer Raffat wrote on Nov. 4, and the company’s stock has fallen 21% since the announcement.
Apellis executives spent a majority of the company’s quarterly earnings call Monday afternoon defending their plan. The results from the two studies got better with time, improving the perception of the drug among retinal specialists, they claimed. Apellis also completed the data package for the two-year results faster than expected and could submit them in the U.S. without impacting a filing in Europe, CEO Francois said.
As a result, Apellis could get the “best possible label” with only a short delay in receiving a billing code for insurance reimbursement.
“Sometimes you have to make difficult choices," Francois said, adding the FDA is aligned with the decision and the company “strongly believe[s]” that it was the right call.
Still, the move caught analysts off guard and narrowed Apellis’ lead over Iveric, which last week accelerated its application and now expects to file it by the end of the year. “We were surprised by [Apellis’] willingness to take this approach,” wrote Stifel analyst Annabel Samimy, noting an estimated three-month lead over Iveric is “barely enough time to gain a foothold in the marketplace.”
It also adds new uncertainty for both developers. Apellis’ Phase 3 trials were designed to read out results earlier, so it’s unclear how the FDA will view the new data, Samimy wrote. Additionally, some investors believe that information could “‘force the FDA’s hand’” and require Iveric to have two-year data to get to market, even though the regulator has signed off on its trial design, Jefferies analyst Chris Howerton wrote.
“[The] FDA can, and will, incorporate new information if deemed important enough,” Howerton wrote.
Iveric’s shares have fallen about 12% since Apellis’ announcement.