Apellis Pharmaceuticals snagged Food and Drug Administration approval for the first-ever treatment for an age-related eye affliction, leading APLS stock to surge Tuesday.
Coming late Friday, the FDA's nod arrived a week ahead of expectations for its treatment for geographic atrophy, an advanced form of the eye disease age-related macular degeneration. Apellis Chief Executive Cedric Francois says there are 1 million patients in the U.S. and 5 million globally. Geographic atrophy, also known as GA, can lead to permanent vision loss and tends to affect people over the age of 65.
Now, the biotech company says it's working to launch the new drug, dubbed Syfovre, "within a week or two," according to Needham analyst Joseph Stringer. The launch sets Apellis up with an advantage over Iveric Bio. Iveric has a rival drug set for FDA review in August.
"Other than that competitor, it will take many, many years for another to reach the market," Francois told Investor's Business Daily.
On today's stock market, APLS stock surged 5.4% to close at 58.50. Meanwhile, shares of Iveric toppled 13.6% and ended the regular session at 18.96.
APLS Stock: Best-Case Broad Label
The FDA approved Syfovre with a broad label, Needham's Stringer said in a note to clients. Patients with two types of vision loss can receive monthly or every-other-month injections in the eye.
"In our view, the label is very strong, exceeding some investor expectations, and represents a best-case approval scenario," he said. "We think the label bodes very well for commercial uptake."
Apellis ran two clinical studies of Syfovre over two years. Syfovre patients treated monthly in a study called Derby had a reduction of up to 36% in the growth of their eye lesions between 18 and 24 months.
Iveric is also testing a treatment for geographic atrophy called Zimura. But Iveric is still waiting on the results of a study testing its every-other-month dosing regimen.
Stringer expects strong uptake for Syfovre. Following a survey of 25 U.S.-based retina specialists, he raised his price target on APLS stock to 80 from 70. Investors are now questioning whether Syfovre can outperform Zimura in the commercial market.
"Most respondents plan to use both Syfovre and Zimura in practice, but would favor Syfovre," he said.
On average, physicians expected to have 36% of their patients on Syfovre and planned to treat 30% with Zimura. Further, respondents expect patients to receive 7.5 injections per year. Apellis is selling each vial at a wholesale acquisition cost of $2,190. That's the price before insurance and discounts.
Will Capacity Constrain Launch?
Wedbush analyst Laura Chico expects Syfovre to generate $63 million in sales this year, below broad projections for $106 million. She increased her price target on APLS stock to 51 from 47, but kept her neutral rating on shares.
"Our hats are off to Apellis with a flexible label that accommodates dosing up to every 60 days, as this will help encourage adoption," she said in her note to clients. "That being said, we do think capacity limitations will make for a more challenging launch environment."
But CEO Francois says he doesn't expect any bottleneck in injections. There have been drugs injected into the eyes for 15 years now. They include drugs like Roche's Avastin and Lucentis, and Regeneron Pharmaceuticals' Eylea.
"The whole system is actually in place for retinal doctors to be able to very quickly and rapidly adopt this product and be able to offer it to patients immediately," he said.
The news sent APLS stock to its highest point since early October.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
