APL-2006

Apellis Pharmaceuticals is laying off about 25% of its staff to find up to $300 million in savings, making it the latest biotech company that is shrinking now to find a way to grow in the future. The corporate shakeup will turn the company’s focus to selling an eye disease drug whose launch earlier this year has been clouded by post-marketing reports of a rare complication. The restructuring announced Tuesday will cut about 225 full time employees. As of the end of 2022, Waltham, Massachusetts-based Apellis reported its headcount was 767. The company said its field-based commercial and medical employees will be minimally affected by the cuts. Those workers will be tasked with the ramping up the commercialization of Syfovre, a drug approved in February for treating the vision-loss disorder geographic atrophy. Syfovre is a peptide drug designed to block C3, a protein of the complement system that’s associated with the excessive immune response contributing to geographic atrophy. In July, reports of a type of eye inflammation called occlusive retinal vasculitis surfaced in a small number of patients who received Syfovre. Apellis later confirmed the adverse effect in seven patients who received the drug, which is administered as an injection into the eye. No such complications were reported in clinical testing of Syfovre, and the company said there were no indications that the manufacturing process contributed to these adverse effects. In an update of its review of the eye complications, Apellis said last week that it identified variations in the 19-gauge filter needle included in certain injection kits. While Apellis said it has not found a causal relationship between this needle and the reported adverse effects, the company is recommending clinicians use kits with the 18-gauge filter needle. In the first half of this year, Apellis reported $85.7 million in Syfovre sales. The company said workers remaining following the restructuring will focus on supporting the U.S. commercial launch of the drug as well as potential launches in other markets. A European Medicines Agency decision is expected early next year. The company has prioritized an initial launch in Germany. The drug is still under review in Canada, Australia, the United Kingdom, and Switzerland. The commercialization push comes as Syfovre faces new competition from Izervay, an Astellas Pharma geographic atrophy drug that won its FDA approval in early August. As Apellis focuses its efforts on marketing Syfovre, it will scale back efforts on its first FDA-approved product, Empaveli. That drug, which contains pegcetacoplan, the same main component of Syfovre, is a treatment for the rare blood disorder paroxysmal nocturnal hemoglobinuria. But Empaveli has not become a big revenue generator for the company. In the first half of 2023, Apellis reported $42.7 million in revenue for that product. The restructuring will reduce the company’s expenses for that drug. Apellis will also shelve two preclinical programs: APL-030 for neurological disorders and APL-2006, a potential treatment for both geographic atrophy and the wet form of age-related macular degeneration. Apellis will continue developing a systemic version of pegcetacoplan for treating immune complex membranoproliferative glomerulonephritis and C3 glomerulopathy, two rare kidney diseases with no approved treatments. A Phase 3 study is underway testing the drug in both diseases. Preliminary data are expected in 2024. But Apellis will not start any new programs with systemic pegcetacoplan. The restructuring is expected to lead to up to $300 million in savings through 2024. In addition to $70 million in savings related to the layoffs, up to $230 million is related to eliminating planned external expenses. The layoffs will lead to a one-time charge of between $9 million and $11 million, which will be incurred mainly in the second half of this year. “These were difficult, but necessary, decisions,” Apellis CEO Cedric Francois said in a prepared statement. “We are thankful for the commitment and contributions of our colleagues who have worked relentlessly to advance life-changing medicines for some of the most challenging diseases patients face.”