Apellis Pharmaceuticals, Inc. (APLS) Earnings Call Transcript

Sorry.

By May 4? Okay.

So that's -- we're not seeing the same friction that we kind of expected and which is a good thing.

Okay. So given your early experience now with seeing commercial uptake, how important -- is the J-code as important as it was before?

The J-code is important. We've always believed it was important. I think what we were more surprised by was -- I shouldn't say surprised, but gratified by, we thought there would be the demand there. And I think the willingness to use the product and the demand has overcome some of that desire to wait for a J-code that we thought was there. But we still think that's a major inflection point for us in terms of getting utilization. We do hear from a number of doctors that they're going to wait until the J-code comes. So it's hard to quantify what the difference is going to be but we know it's there and we know it's big. And we also know, for example, that is a time point when samples are less in demand because docs will actually get -- they make more money on these.

What is the profile of patients? Do you know that's being recommended the drug in the early days?

Again, it's more conjecture from what we discussed with physicians. But what we suspected was going to be, kind of the wave of patients is kind of materializing as well, which means patients who may be blind in one eye have already experienced what that's like and are at risk of losing vision in their other eye. Highly motivated, I hate to say it but afraid, right, and in search for treatment. That, depending on which papers you look at as high as 30% to 40% of the overall GA population. What's also an interesting segment is patients with wet AMD who are on treatment with anti-VEGF and who develop macular atrophy secondary through that treatment. And that's something interesting because it's not kind of your intuitive population, but we see retina docs that see patients for an anti-VEGF injection. They may see a lot of atrophy, they have SYFOVRE the fridge, they're going to try it. And I think a posology that become attractive in the future for these physicians is 1 month SYFOVRE, 1 month of anti-VEGF. So I think ironically -- well, not ironically, we cannot expectedly -- in the beginning, you get kind of the clinical adaptation that are advanced but we all know based on these increasing effects over time, that treating earlier is better. right? So -- and over time, we expect that to shift where as physicians become happy with the way of they administer it, understand the safety of the product, et cetera. that it will shift towards earlier treatment, which is really where the drug will have the best chance to giving the maximum benefit.

Yes. So maybe in line with that, could it be, and this is what maybe people who are a little bit more conservative on the initial uptake of your launch would say is, well, there's a bolus of patients that obviously would want this drug initially. But once that bolus is clear that, that demand that seems outsized will start to flatten out. I mean what's your view on what the nearer-term trajectory of the launch is going to be over not just the next quarter or so, but let's say, the first year?

Yes. I think, look, first of all, talking about these patients that have already experienced vision loss in one eye. That is 30% to 40%, enormous number when you account for it. But then beyond that, I mean, I can tell probably in this well-educated audience. If you sit in front of retina doctor and they tell you that you have a disease where your retinal cells are dying, most of us are probably not going to wait to lose vision before you take action, right? So I think there's an important segment there as well. And last but not least, I think this is important, is that there's a lot of patients with geographic atrophy that are not being seen by retina doctors right now because there was no treatment available, right? Beyond that, if you ask a retina doctor today, what do you see most patients with wet AMD or GA? They will, of course, tell you patients with wet AMD, much, much more. Why is that? Because patients with wet AMD are being seen every 1 to 2 months,patients with GA, if you're lucky, once a year. right? So if you have an equal prevalence of these 2 populations on a daily basis, you're going to have 6x fewer patients with GA that with wet AMD. So all these factors are important to impute in the models. And what that all tells us is that there's an enormous demand they're in a much larger patient population than my intuitive to even the retina doctors.

Yes. So you make a couple of good points there, Cedric. I did want to ask about how important it is going to need to have the patient be educated as well as the physician. So how much of the demand do you think needs to come from patients asking their doctors for the drug? And can you talk about whatever DTC plans you have?

Yes. The patient demand is really, really important here, right? So our patient hub right now on a daily basis has 100 people answering questions and we're going to run that up to 200. I mean it is a really important segment, I mean, again, reflecting the demand that is out there. And then, of course, as you mentioned, we have the DTC campaign and maybe Tim you can briefly talk about your favorite actor.

Well, Henry Winkler, we partnered with him on the DTC campaign and that's just starting now. And I think that's -- we all believe that's going to raise awareness, not just among patients, but also optometrists, referring ophthalmologists. So when you throw that, I mean you're talking about the idea of what demand looks in like kind of short to medium term. You've got the J-code coming. You've got the DTC campaign, which goes to everybody, not just...

Is that television? Is that print? What is it?

All of it -- if you haven't already at some point, we hope you will see Henry Winkler talking about his father-in-law who had AMD, and he was very, very passionate, personally passionate about this. So -- and then we have just the idea that these doctors are gaining some experience, right? And I think the central sort of the gelling of the realization that you need to get disease early with the increased effects over time, I think those 4 pieces kind of converge together to really build a good case for a long-term momentum.

Okay. Do you have any sense for what longer-term compliance is going to be a longer-term drop out? Because I think all of us are on board with everything that you've said about under met need, high demand, people are going to want to try it. Patients are motivated. But what about the argument that if over time, the changes that you're preventing from happening are not noticeable to a patient the way that a visual acuity benefit is easily noticeable to a patient. How does that over time impact the person's will power or desire to continue to be on treatment? That seems to be the big crux of the question that I get from everybody.

Yes. Two things there. One, going back to having experienced vision loss in one eye. It's a really important driver of compliance. And the second piece, and this is the one that I believe is important because we often get the question in the wet AMD, right? I mean you have this immediate visual acuity benefit when you give an anti-VEGF injection. This is true. But if you have a good retina specialist, that should happen only once on your first treatment, right? You get an anti-VEGF injection because you have wobbly vision, right? And it is true that you have this dramatic improvement on that first experience. After that, if you're on your schedule and you are compliant, you should not have another episode of vision loss. That's actually against what you should be doing. And so the compliance rate that we see with anti-VEGF, we think are actually not a bad corollary for what you will end up seeing in geographic atrophy and coincidentally in our clinical trial, not just in DERBY and OAKS during the 2 years of the Phase III clinical trial, but also in the 3-year extension in GALE, we see a drop off rate of about 1% per month, which is very similar to what you have with anti-VEGF trials.

Yes. So GALE was on my question list as well. So as you continue to educate physicians, how important is the GALE study itself going to be and getting more doctors on board about convincing them on the longer term efficacy of the drug?

Yes. I think that -- I think it goes a little bit beyond getting doctors on board. There's kind of 2 important segments of physicians. There are physicians that see a lot of patients, right? And we're -- being able to fit into the flow of these physicians is really, really important. Having 25 to 60 days on the posology, and I think that flexibility of scheduling, quite frankly, that is there, really important to those physicians. I think the broad label where you don't have to distinguish between sub 4 wheel or extra 4 wheel, you have GA, you get treated. That allows you to treat more than 60 patients per day and do what needs to be done. And then you have the key opinion leaders, which, of course, have a much more academic interest into what is going on with the specific layers in the retina, what are these increasing effects over time. And for those key opinion leaders to understand the benefit, GALE is very important, right? The key features of SYFOVRE that led to its approval. And this is direct feedback from the FDA are that SYFOVRE has an increasing effect over time. That means that the longer you treat with SYFOVRE, the more you slow down the generative process. After year 1, you are at more or less 20%. After year 2, you are at more or less at 30% and after year 3, we're going to find out, right? I mean in the fall in GALE what you get there. But those increasing effects over time are really important and shoulds, for example in GALE, you get even beyond 30%. I mean that's highly, highly meaningful in terms of saving these sort of receptor cells that you would otherwise lose. Also, the longer you evaluate these patients, the more the very crude way that we have of measuring function will start to show a signal through the noise, right? We've already -- we presented some of those data 2 weeks ago. So that is all very exciting and all pointing in the direction that we were hoping for. Combine that with what is now -- which was a very substantial safety database based on 2 full years of dosing and 12,000 injections. And now the real world experience where we are close to or probably already surpassing what we did in the Phase III clinical trial, all of that is very gratifying as we come together.

Okay. I'd like to spend a minute or so talking about Europe. Where are you in terms of getting SYFOVRE approved there? I know you've talked about European physicians being aware that it's already available in the U.S. and that there's already demand for that to also happen in the big EU5 countries. But what is your expectation of when this could launch?

Yes, we expect to be approved early next year in Europe and then to have the typical country-by-country rollout that is customary in Europe, starting with Germany, France. I mean those are typically the first 2 countries to provide access and then the other ones following quickly. The approval process is going very well. And as you mentioned, there's the U.S. approval, which, of course, the European regulators look at. That was an important check box. And then we have the European KOL community that we spend a lot of time educating who now understand how this drug works, what it does, again, with this increasing effects over time, the correlation to function, where we also have really interesting and accumulating data. So we think that the approval is on a very good path. Coincidentally with that, of course, we have to also work on proper reimbursement. So we started our discussion with all of the most important payers in Europe a long time ago. We've met with the G-BA already 4 times. We have another meeting scheduled at the German reimbursement agency. We were quite nice as well. I mean all of that work to make sure that reimbursement is where it needs to be as well is taking place.

So how should we think about the cadence of the European launch what you expect to see, again, just this is only one quarter of sales, but what you expect to see in the U.S. in general?

Yes. That we -- I don't think we're ready to provide guidance on that. I mean, our first goal is to get approval and to then see how reimbursement falls into place, which is quite a bit more complex than it is in the U.S. So as many -- most of you probably know, in the U.S., you get approved, CMS typically with 1 if you [indiscernible] in place and then you have Medicare with about 50% of patients having Medicare Advantage plans that typically also go in lockstep. So all of that work is quite straightforward compared to the country-by-country reimbursement that need to be negotiated in Europe.

Have you thought about using a European partner for the Europe launch? Or is it important that you retain full rights?

No, we are fully dedicated to doing the commercialization in Europe ourselves. That is something that for many reasons, we prioritized a couple of years ago. We believe that holding these assets with the first and only approved product for geographic atrophy, on the global scale provides a very unique asset. And we're at least, in Europe, controlling the complete rollout ourselves as well as possible. Bayer did it, as you know, for Elia. And as we know from the U.S., yes, this is a specialty normally, to embark in a specialty level in Europe for a company like ours would be a fool's errand, but in this indication, it's not only possible, but highly profitable.

Okay. Maybe last question for me. Assuming that another complement inhibitor is approved later this year, and presumably launched by Astellas. How do you see the market evolving now that you know who's going to be handling presumably that launch? Does that change any of your plans, any of your internal targets for where you want to be market share wise, let's say, a year from now?

Yes. So we wish Iveric and Astellas a productive partnership, does not change our plans. We have -- we believe a rather extraordinary competitive advantage. We have, of course, the first-mover advantage, but then we have these increasing effects overtime, which we have yet seen with Zimura. We have to wait for the 2-year data. We have the efficacy vis-à-vis the fellow eye, which, again, we have not seen from Zimura, both of which were important, critical in our approval process but are also important for physicians, right? To put that in context with every other month dosing, we have already, at 1 year 50% better efficacy, at 2 years twice the efficacy that Zimura has with monthly dosing. And we have health of the side effects associated with the injections, of course, right? Combined with that, of course, we have the ability to treat all types of geographic atrophy, which is important in the retina practice as well. So I think the limited data set that Zimura has available to them, we believe, within the best of case, it lead to a label that will provide a very difficult point of entry in the retina practices where by that point in time, we will be the standard. Once we have our approved J-code early October, as we expect, even if Zimura is approved, we think it's going to be quite difficult for them to find a place.

Okay. With that, we're just about out of time. So thanks, guys, for presenting at our conference once again. It's great to have you, and thanks everybody for joining us at this session.

Thank you, Tazeen.

Thank you.