Apellis Pharmaceuticals' new eye drug, Syfovre, crushed expectations in its first quarter post launch, sending APLS stock to a record high.
Syfovre, a treatment for geographic atrophy, launched in February. Geographic atrophy is a progressive condition that can lead to permanent vision loss.
In roughly half a quarter, Syfovre brought in $18.4 million in sales. That obliterated expectations for $1.5 million to $5 million, according to various analyst reports.
"Despite some questions on the long-term persistence, this has been undoubtedly a much better start than what investors were expecting and better than what we had previously modeled, with substantial upside to our estimates if these trends continue to hold up over the next few quarters," Credit Suisse analyst Tiago Fauth said in a note to clients.
On today's stock market, APLS stock surged 10.4% to end the regular session at 93.18. That put shares at their highest-ever point.
APLS Stock: Total Revenue Beats
Total revenue rocketed 211% to $44.8 million and came in well ahead of expectations for $26.1 million, according to FactSet. Apellis' massive growth follows Syfovre's launch.
Apellis also sells Empaveli, a treatment for paroxysmal nocturnal hemoglobinuria, or PNH. PNH is a rare blood disease in which the immune system attacks and damages the red blood cells and platelets. Sales of Empaveli surged almost 69% to $20.4 million in the first quarter.
The remainder of Apellis' sales stem from additional licensing and other revenue associated with its collaboration with Sobi, a biotech company focused on treatments for rare diseases.
Apellis lost $1.56 per share in the quarter, deepening from a year-earlier loss of $1.42. Analysts covering APLS stock expected a slightly smaller loss at $1.48 per share.
Syfovre Demand Could Be Lumpy
Analysts noted demand for Syfovre could be choppy in the coming quarters.
"Management somewhat tempered expectations on the call for 2023 sales given the relatively short launch timeline and noted that demand and sales may be lumpy in 2023, but we think the initial metrics bode well for continued momentum in 2023-plus," Needham analyst Joseph Stringer said in his note to clients.
So far, Apellis has shipped about 6,000 vials of the injection. Management estimates distributors keep about two to three weeks of inventory on hand and that physicians have one to two weeks of order in stock, he said.
"Apellis believes this will be the steady-state going forward," he said.
He expects the European Commission to approve Syfovre in the first quarter of 2024. He raised his price target on APLS stock to 110 from 80 to reflect the strong launch. Stringer has a buy rating on the biotech company's shares.
Is A Takeover In The Cards?
Now, investors are watching to see if momentum continues to Syfovre's launch.
Astellas Pharma is buying Apellis' rival, Iveric Bio, for $5.9 billion. Iveric is hoping to gain approval in the next three months for a treatment for age-related macular degeneration, another progressive disease that can cause permanent vision loss.
"With Astellas seeking to acquire competitor Iveric, we do think this may shift the calculus for a potential Apellis takeout and will require a strong Syfovre launch," Wedbush analyst Laura Chico said in a note.
She raised her price target on APLS stock to 85 from 67, but kept her neutral rating.
APLS stock holds a nearly perfect IBD Digital Relative Strength Rating of 98. Further, this means shares rank in the top 2% of all stocks in terms of 12-month performance.
More to follow.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
