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Apellis (APLS) Up More Than 60% in Past 3 Months: Here's Why

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Shares of Apellis Pharmaceuticals, Inc. (APLS - Free Report) have rallied 66.7% in the past three months compared with the industry’s increase of 2.1%.

The company has made steady progress with its lead drug, Empaveli (pegcetacoplan), which is approved by the FDA as a monotherapy treatment for adult patients suffering from paroxysmal nocturnal hemoglobinuria (PNH), during this period.

Apellis has seen a strong initial uptake of Empaveli since its approval in May 2021.

PNH, a rare blood disorder, is associated with abnormally low hemoglobin levels as the disease destroys red blood cells.

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Empaveli is approved for treatment-naïve patients as well as for those switching from Alexion’s [now part of AstraZeneca (AZN - Free Report) ] C5 inhibitor therapies for PNH, namely, Soliris and Ultomiris.

AZN closed the acquisition of rare-disease drugmaker, Alexion, for $39 billion last July.

The Alexion buyout strengthened AstraZeneca’s immunology franchise, adding several drugs that can boost its top line.

In December 2021, the European Commission ("EC") approved Aspaveli (pegcetacoplan) for the treatment of adult patients with PNH who are anemic after treatment with a C5 inhibitor for at least three months. The drug is marketed under the trade name Empaveli in the United States.

Apellis is currently evaluating pegcetacoplan, its targeted C3 therapy for treating several other indications.

The company submitted a new drug application (NDA) to the FDA seeking approval for the treatment of geographic atrophy (GA) secondary to age-related macular degeneration (AMD) in June 2022.

In July, FDA accepted and granted priority review to its NDA for pegcetacoplan for the given indication. A decision from the regulatory body is expected on Nov 26, 2022. This can be a catalyst for the stock to remain high during this period.

A marketing authorization application for pegcetacoplan to treat GA is expected to be filed later in the second half of 2022 to the European Medicines Agency.

The phase II MERIDIAN study is evaluating systemic pegcetacoplan for treating amyotrophic lateral sclerosis (ALS). Enrollment in the study has been completed, with top-line data from the same expected in mid-2023.

Potential label expansion of the drug for any of the above indications will be a boost to the company’s top line.

Though Apellis has made steady progress so far with Empaveli, we are concerned about the lack of other candidates in the company’s pipeline. Due to the lack of a strong pipeline, the company is heavily dependent on Empaveli for growth. Any regulatory or developmental setback for the drug will hurt the stock in the days ahead.

Zacks Rank & Stocks to Consider

Apellis currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the biotech sector are Achilles Therapeutics plc (ACHL - Free Report) and ORIC Pharmaceuticals, Inc. (ORIC - Free Report) , both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Achilles Therapeutics’ loss per share estimates narrowed 6.4% for 2022 and 9.6% for 2023 in the past 60 days.

Earnings of Achilles Therapeutics surpassed estimates in three of the trailing four quarters and missed on the remaining occasion. ACHL delivered an earnings surprise of 12.45%, on average.

ORIC Pharmaceuticals’ loss per share estimates narrowed 8.6% for 2022 and 22% for 2023 in the past 60 days.

Earnings of ORIC Pharmaceuticals surpassed estimates in three of the trailing four quarters and missed on the remaining occasion. ORIC delivered an earnings surprise of 8.85%, on average.

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