Apellis Pharmaceuticals, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Apellis Pharmaceuticals, Inc. has filed its 2023 10-K report detailing its financial performance and business operations for the fiscal year ending December 31, 2023.</b>

AI Summary

Apellis Pharmaceuticals, Inc. (APLS) filed a Annual Report (10-K) with the SEC on February 27, 2024. Apellis Pharmaceuticals, Inc. filed its 2023 Form 10-K on February 27, 2024. The filing covers the fiscal year ending December 31, 2023. The company's principal business is in Pharmaceutical Preparations (SIC 2834). Key agreements mentioned include SFJ Agreement and Collaboration and License Agreement. Financial instruments and accounts such as Convertible Senior Notes, Additional Paid In Capital, and Allowance for Chargebacks, Discounts and Fees are detailed.

Why It Matters

For investors and stakeholders tracking Apellis Pharmaceuticals, Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of Apellis's financial health, operational activities, and strategic positioning for the past fiscal year, crucial for investors and stakeholders to assess the company's performance and future prospects. The detailed financial statements and risk factors within the report are essential for understanding the company's revenue streams, debt obligations, and potential challenges in the pharmaceutical market.

Risk Assessment

Risk Level: medium — Apellis Pharmaceuticals, Inc. shows moderate risk based on this filing. The company operates in the highly regulated pharmaceutical industry, facing risks related to drug development, clinical trials, regulatory approvals, and market competition, as evidenced by the mention of various product and agreement-related financial items.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-K to assess Apellis's financial performance and strategic direction for 2024.

Key Numbers

• 2023-12-31 — Fiscal Year End (Reporting period)
• 2024-02-27 — Filing Date (Date of submission)
• 105 — Public Document Count (Number of documents in the filing)
• 2834 — SIC Code (Pharmaceutical Preparations)

Key Players & Entities

• Apellis Pharmaceuticals, Inc. (company) — Filer name
• 2023-12-31 (date) — Fiscal year end
• 2024-02-27 (date) — Filing date
• 2834 (industry_code) — Standard Industrial Classification for Pharmaceutical Preparations
• Cedric Francois (person) — Mentioned in context of specific date ranges
• Nur Nicholson (person) — Mentioned in context of specific date ranges
• Swedish Orphan Biovitrum AB Publ (company) — Mentioned in context of Collaboration and License Agreement
• Empaveli Pegcetacoplan (product) — Mentioned in context of specific date ranges

FAQ

Risk Factors

• Customer Concentration Risk [medium — market]: Risk associated with reliance on a single customer (Customer A) for sales revenue.
• Regulatory Approvals and Compliance [high — regulatory]: The company is subject to extensive regulation by government authorities, impacting product development and market access.
• Convertible Senior Notes [medium — financial]: The company has outstanding convertible senior notes, which carry risks related to conversion, interest payments, and potential dilution.
• Product Revenue Allowance and Reserves [medium — operational]: Management of allowances and reserves for product revenue can impact reported sales and profitability.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K.
• 2024-02-27: Filing Date — Date the 10-K was officially submitted to the SEC.

Key Financial Figures

• $0.0001 — nge on which registered Common Stock, $0.0001 par value per share APLS Nasdaq Glo
• $528.6 m — tain profitability. Our net losses were $528.6 million, $652.2 million, and $746.4 milli
• $652.2 m — ty. Our net losses were $528.6 million, $652.2 million, and $746.4 million for the years
• $746.4 million — ere $528.6 million, $652.2 million, and $746.4 million for the years ended December 31, 2023,
• $275.2 million — r ended December 31, 2023, we generated $275.2 million in U.S. net product revenue from sales
• $91.0 million — ecember 31, 2023 and 2022, we generated $91.0 million and $65.1 million, respectively, in U.S
• $65.1 m — nd 2022, we generated $91.0 million and $65.1 million, respectively, in U.S. net produc

Filing Documents

• apls-20231231.htm (10-K) — 3786KB
• apls-ex10_28.htm (EX-10.28) — 41KB
• apls-ex21_1.htm (EX-21.1) — 22KB
• apls-ex23_1.htm (EX-23.1) — 4KB
• apls-ex31_1.htm (EX-31.1) — 15KB
• apls-ex31_2.htm (EX-31.2) — 15KB
• apls-ex32_1.htm (EX-32.1) — 9KB
• apls-ex32_2.htm (EX-32.2) — 9KB
• apls-ex97_1.htm (EX-97.1) — 32KB
• apls-ex97_1.pdf (EX-97.1) — 112KB
• img114409135_0.jpg (GRAPHIC) — 13KB
• img138179509_0.jpg (GRAPHIC) — 25KB
• img138179509_1.jpg (GRAPHIC) — 77KB
• img138179509_2.jpg (GRAPHIC) — 54KB
• 0000950170-24-020614.txt (&nbsp;) — 14646KB
• apls-20231231.xsd (EX-101.SCH) — 1986KB
• apls-20231231_htm.xml (XML) — 2332KB

Business

Business 5 Item 1A.

Risk Factors

Risk Factors 48 Item 1B. Unresolved Staff Comments 98 Item 1C. Cybersecurity 98 Item 2.

Properties

Properties 99 Item 3.

Legal Proceedings

Legal Proceedings 99 Item 4. Mine Safety Disclosures 99 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 100 Item 6. Reserved 101 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 102 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 119 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 119 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 151 Item 9A.

Controls and Procedures

Controls and Procedures 151 Item 9B. Other Information 152 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 153 PART III Item 10. Directors, Executive Officers and Corporate Governance 154 Item 11.

Executive Compensation

Executive Compensation 154 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 154 Item 13. Certain Relationships and Related Transactions, and Director Independence 154 Item 14. Principal Accountant Fees and Services 154 PART IV Item 15. Exhibits, Financial Statement Schedules 155 i Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA This Annual Report contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Annual Report, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management and expected market growth are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about: the ongoing commercialization of EMPAVELI and SYFOVRE; our plans with respect to our ongoing and planned clinical trials for our product candidates, whether conducted by us or Swedish Orphan Biovitrum AB (Publ), or Sobi, or by any future collaborators, including the timing of initiation, dosing of patients, enrollment and completion of these trials and of the anticipated results from these trials; our sales, marketing and distribution capabilities and strategies, including for the commercialization and manufacturing of EMPAVELI, SYFOVRE and any future products; the rate and degree of market acceptance and clinical utility of EMPAVELI, SYFOVRE and any future products; our estimates regarding the rate of incidence of retinal vasculitis f

B usiness

Item 1. B usiness. Overview We are a commercial-stage biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutic compounds to treat diseases with high unmet needs through the inhibition of the complement system, which is an integral component of the immune system, at the level of C3, the central protein in the complement cascade. We believe that this approach can result in broad inhibition of the principal pathways of the complement system and has the potential to effectively control diseases with high unmet need and that are driven by excessive complement activation. In February 2023, the U.S. Food and Drug Administration, or the FDA, approved SYFOVRE (pegcetacoplan injection), the first approved treatment for geographic atrophy secondary to age-related macular degeneration, or GA. We believe SYFOVRE has the potential to be a best-in-class treatment for patients with GA, a disease that affects more than one million people in the United States and five million people worldwide. We launched SYFOVRE in the United States in March 2023. For the year ended December 31, 2023, we generated $275.2 million in U.S. net product revenue from sales of SYFOVRE. In December 2022,we also submitted a marketing authorization application, or MAA, to the European Medicines Agency, or EMA, for intravitreal pegcetacoplan for the treatment of GA. The EMA subsequently provided MAA validation and the application is under review. In January 2024, the Committee for Medicinal Products for Human Use, or CHMP, adopted a negative opinion on the marketing authorization application, or MAA, for intravitreal pegcetacoplan. We are initiating the re-examination of the application. Marketing applications submitted to regulatory authorities in Canada, Australia, the United Kingdom, and Switzerland for the treatment of GA are currently under review. We have exclusive, worldwide commercialization rights for intravitreal pegcetacoplan. In November 2

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