Okay, okay, great. Now I can hear myself talking. All right, good morning, everybody. Thanks for joining us. Welcome to the Bank of America Healthcare Conference. I'm Tazeen Amad, one of the Senior Biotech Analysts here at the bank. Our next presenting company is Apellis Pharmaceuticals. Presenting for Apellis this morning is Cedric Francois, who is Co-Founder, President, and CEO of the company. Sitting next to him is Tim Sullivan, who is the CFO. Good morning, gentlemen. Thanks for making the trip over. Thank you, Tazeen. Great to be here. We'll go into the specifics of the company in a second, but I wanted to go through a couple of macro questions. Again, I'm always finding myself surprised lately that as a SMID Analyst, I'm addressing macro questions with companies. The most recent one, let's talk about what happened yesterday with the executive order. As it relates to Most Favored Nation, can you maybe walk us through the impact to the company, if at all? Again, details are not that specific. One thing I'll point out is, of course, SYFOVRE is a U.S. sales product, not a company. Maybe can you talk to EMPAVELI and how that could be impacted? Sure, I'm happy to do that. Thank you for having us. EMPAVELI is, you know, in terms of total exposure, right, it's limited to, at least at this point, it looks like it's limited to Medicare, but we don't know what the full impact is. Typically, at least historically, there have been carve-outs for companies where they don't control the pricing ex-U.S. and we obviously don't. Sobi has all of the ex-U.S. rights. There's a lot to figure out with all of this. You know, and at least at this point, you know, it's hard for us to comment, right? That's one factor we're definitely monitoring. Okay. Can you talk about manufacturing? Where does that occur? We can. We can talk about what we've disclosed so far, which is where our drug substance is manufactured. That's by Bockham in Switzerland. We also talk about our polyethylene glycol component. That's manufactured by NOF in Japan. What we haven't disclosed is where our drug product is manufactured. We can't talk about that right now, but we think our exposure is not very large. Why is that? Because of where we manufacture. Do you think that the impact to gross margin would not be meaningful relative to where you are now? Look, we're obviously monitoring the tariff situation, and we're analyzing for any potential impacts and what we can do to mitigate those. You know, we're going to keep you updated as those thoughts evolve and as we know more. Okay. Last question is about FDA, just given changes that have been occurring at the agency for the last couple of months. In your interactions with the people that you normally speak to, have you noticed any changes in timelines, any changes to the people that you're speaking with, et cetera? No, this is a short answer. So, you know, there's a bit of a division-specific aspect, I suppose, but our division so far has been functioning very well. We got our priority review, as you know, and we also have a very clear readout in our phase III clinical trial, which would hopefully help to make this an easy review for them. So far, no indications that any delay may be coming. Okay. Let's talk about SYFOVRE, some of the trends that we've seen, let's say, over the last year and most recently this quarter. Top of mind is the impact from the resourcing related to foundations. Cedric, can you just talk to us about that in general for those who might not be as familiar with how foundations play into retina disease drug space in general? Yeah, thank you, Tazeen. Maybe the broad picture first. The patients who are on treatment with either anti-VEGFs or with GA treatments like SYFOVRE are responsible for a copay of approximately 20% of the product. You know, it's about $400 worth of copay every time a patient receives an injection. Now, that copay can be addressed either through Advantage Plans or can be addressed through foundations that are independent charitable organizations to which companies like Apellis, et cetera, can donate. There is a Chinese wall. We do that because we care about patients. There is absolutely no commercial context to that. Those donations are then used to help patients in need cover that $400. Now, of the overall GA population, and it probably translates to the anti-VEGF population as well, approximately 20% of patients are affected by all of a sudden the drop in funding that happens at the most important foundation called Good Days. There's a, you know, lots of stories around there as to why that funding dropped, but pretty much over the course of the end of last year and the beginning of this year, that funding suddenly fell away. These patients now are faced with a couple of choices with their physicians. The first one is, you know, maybe as a patient, you find a way to still afford that copay. The second one is you could, you know, maybe try to get funding through your Advantage Plan. It was easy to get funding from these charitable organizations, so sometimes maybe not enough effort was put into it. The third one is certainly some patients as well, you know, are seen by the physician who makes much less money if they use a sample, right? They can use a sample for the patient or they can tell the patient to come back in a couple of months. There is an important impact on revenue that we get from that, of course. What we've also seen is a very meaningful uptick in sample usage. That is indicative of physicians caring about patients, wanting to make sure that they keep on being treated. In the next couple of quarters, we're going to see how that all settles out. Yeah. One of the companies that has been contributing over the last several years is Regeneron. For a number of reasons, they've, as you said, been one of the companies to have pulled back. Are we just waiting for a company to start funding the foundation again? They seem to have made the statement that they want it to be a little bit more evenly distributed among all of the different companies that have products. Maybe one question I have for you is, are all of the companies planning on talking to each other about this or how is it actually going to get resolved? Yeah, there's no, and there cannot be coordination around this. These are charitable donations that are made agnostic of what the outcome is on commercial impact. We make our donation or made a donation at the beginning of the year to Good Days, as we did last year as well. You know, that is all we can do, unfortunately. If the timeline for resolution remains, it seems murky. What is Apellis going to do about making sure that that market stays robust and resilient? Maybe that's a question also for Tim. Yeah, thank you, Tazeen. I think maybe I'll touch briefly on something that was really, you know, very nice to see for us in the first quarter. If you take the commercial injections and you add the number of sample injections, which increased dramatically, then we actually saw 4% quarter-over-quarter growth between Q4 and Q1. More patients were treated in Q1 than in Q4, in spite of what happened with Good Days. Because again, you're going to have patients where the physician says, "Come back later." That is good organic growth that we see happening in this space. Again, linked to the fact that we're only at about 10% of patients with geographic atrophy that have been treated, there's an enormous kept-up demand there still that exists. As to what we can do is, you know, patients that I think, especially in the Advantage Plan category, we can help, and we can do that compliantly. We can help patients and practices figure out how they can find the proper mechanisms available to them through their insurance plans to be able to afford that copay. I think that's the most important effort. I don't know if Tim can go on that. Yeah, I would add that we can also help these physician offices track their patients to see when they're getting close to their copay and then bring them in. There are certain things we can do there to help as well. One thing sort of analogous or adjacent to what Cedric mentioned is there were patients who had secondary insurance, who the doctors were still going to Good Days because it was just administratively easier. There's a certain percentage of patients who can quickly, you know, go back to commercial product just with their secondary insurance. For the ones who can't, samples may, you know, get them to the point where they can hit their copay in other ways or whatever. Are all those things happening like right now? All those things are happening. Are you seeing the benefit of that already? We see the benefit of that already. I mean, I think one of the benefits is in the total injections, you see the fact that those are still increasing. That is a good sign. That means patients are getting treated. We are certainly missing out on patients, for sure. We just do not, we cannot quantify it. Right. So maybe the better question to be asking is you're still seeing growth despite this, but clearly it's a little bit of a growth that is not at its full potential. It's a headwind, yes. Right. I think most people are of the view that if you can reach the full potential, that would be meaningful from a total market opportunity standpoint. The debate that I've been having with a lot of investors is how big is the practically addressable GA market right now? You know, can you talk to us about what, you know, you don't give official guidance, but thinking about the rest of this year, how should we be thinking about, you know, modeling what sales could be? I think, you know, we did what we could in terms of guidance on the earnings call, which is to say we think the growth will be moderate this year as the physicians figure out what they're going to do about this, right? I think that's the best way to think about it because retinal specialists, these are smart people. They're going to figure out how to get these patients treated. They have all the incentives to do that, right? Including just wanting to treat patients. I think all that gets kind of figured out over time. Yeah, this is a little bit of a reset on maybe the size of the market. Call it at the end of the day, maybe 10%. It's just a guess, right? It's going to grow normally from there once everything gets kind of figured out. That is kind of how we think about it. Okay. Maybe let's talk about the competitive landscape between Apellis and Astellas. One thing that was encouraging is you talked about market share gains that have been made in the first quarter alone. What do you think are the drivers that have been allowing that to happen? Differentiation on efficacy and stabilization on safety. That is the simple answer. We all know that there was a CRL for our competitor in November. That CRL got resolved in February. When you really look at the trends and the gradual takeover that we've had on new patients treated, right? That trend started before the CRL and continued after the CRL resolution, right? To put that in perspective, you know, at the end of the summer, we dipped as low on new patients treated, as low as 40% for SYFOVRE and 60% for our competitor. That has now flipped over into 55% for us versus 45% for our competitor, which is really not a 15, but a 30% flipover, right? That is a very encouraging trend over time. To answer your question, it is very clearly rooted in the perception, the accurate perception that there's a differentiation, a meaningful differentiation on efficacy paired with an advantage with every other month dosing. You know, that is an advantage that we have. We also continue to generate data, of course, over time. We just had the 48-month data from GALE, which looks amazing, right? I mean, it's something that really gives an idea of how much you can do for these patients over time. Those are all elements that I think factor into that trend. In terms of the switch market, just since, like you mentioned, Cedric, about the language in the Astellas label, it still says to dose it monthly. Whether or not doctors are following it is a different question. Have you been made aware from your sales force about patients who may have started on the competing product that because of the more favorable language, less frequent dosing allowed per the label, have chosen SYFOVRE going forward? Yes. We see an advantage on switchovers as well as on new treatments. As you think about, you know, what is going to make, you know, the market number that you have built into your expectations achievable, what is the major variable that you think needs to continue to go well? I think there was, I don't need to tell you, there was a lot of turmoil in this space, right, over the past two years. Right now, we are in a very quiet period where physicians, you know, understand the safety profile, understand that, you know, it was kind of, it's much rarer and much less severe than people at some point thought maybe it was. You know, we haven't seen a case of vasculitis in a long time now. I mean, so there's all these elements that play into it and physicians know about this. Now people can look at the efficacy and kind of with a more quiet mind look at what does this mean for my patients. I think that is really rooted in the overall growth that we will see in front of us. Now, in terms of the real difference maker, rather than kind of a gradual increase in treatment patients, something to look forward to are the AI instruments that we have available to us. In the anti-VEGF markets, anti-VEGFs are amazing drugs for patients with wet AMD, but they became as great as they did because you can do an SDOCT investigation and see the liquid go away in the eye, right? We have the ability to do something similar for patients with GA, where you do not see your patient after a year and the patient asks, "Is the drug working for me?" The physician has to say, "Well, we do not know, but we have to count that it does." We have the tools to actually provide the feedback that the drug is doing what it is supposed to do. Now we have an engineering job to make sure that that is made easily available to physicians and patients. That, I think, not just for us, but for the category is going to make a difference. Even with all this evidence that you're collecting, for some patients, it just might be, you know, difficult to be able to maintain the frequency with which they have to go see doctors, even if it's every other week, because this is something that they can't actually notice themselves. Can you talk about trends that you've seen about discontinuations from the time that the product launched through now? Yeah. We have, the trends are similar to what you see with anti-VEGFs. It's pretty remarkable, right? We're very encouraged by that. I think, again, these AI tools are going to help us further increase that. Is your sales force right-sized? Yes. Have you talked about how big that is? Yeah, I think we've discussed it. It's in the, you know, 50-60 person range if you include medical affairs. If you think about where you want sales to be, do you think that this size is the right size for that? Yeah, absolutely. We spend a lot of time scoping that. We, you know, I can tell you that we have a conversation with a commercial lead for this launch maybe once a week where I say, "Is there anything else you need? Is there anything else you need?" The answer is no in terms of new personnel. Okay. Maybe related to that point, I wanted to ask about cash needs. As you continue to focus on this launch and you have another one that's going to be upcoming, we'll talk about that in a second. Tim, can you talk to us about, you know, where you are on that front? And, you know, if you were going to think about any kind of financing, what options, additional options outside of an equity offering could be attractive? Yeah, I'll just start by saying, you know, we ended the quarter with $358 million in cash and we reiterated our view that that's, you know, that's sufficient to get us to profitability. We aren't, you know, looking to raise capital to become profitable. We have what we need to do that. Okay, perfect. Now let's talk about C3G. Maybe Cedric, can you just give us a quick summary of that program, who the addressable patient populations are, and why Apellis is excited about it? Yeah, thank you, Tazeen. Very exciting launch for us coming up, you know, right around the corner. The [Evolva] is going into plant starting in August. This is our third launch in four years. I think I'm very proud of that. I mean, it's rare to be able to do that. It's rare to be able to do it with the quality of the data that we have, right? In the Valiant study, we studied 124 patients with C3G, but also with IC-MPGN, kind of the sister indication where you can find antibodies in the kidney. That overall population is approximately 5,000 patients split between those two. We then also within those populations looked at pretransplant, but also post-transplant. We looked at adolescents. We looked at adults. We kind of covered the gamut of all the patients that are suffering from this condition. I would say, you know, the readout was as good as we could have hoped for. The one aspect that I always tell people to remember or focus on is that after six months of dosing, already in about 70% of patients on histopathology, the histopathologists could not find a trace of the disease anymore. Really impressive data that we believe are going to make a huge difference for patients. How is this administered and what is the dosing frequency? Same as with PNH. It's a subcutaneous self-administered product at home twice a week. Okay. As we think about the competitive landscape here, Novartis has FABHALTA that's delivered as an oral. How are you thinking about simply comparing them on ease of use for patients? Have doctors told you about their feelings on that, inclusive of incorporating the efficacy data? Yeah. There are very important differences in terms of the readouts and on the efficacy differentiation that we have. I want to point out the one that is most impressive and truly differentiated is the histopathological evidence that we have. We have that advantage squarely in our hands. I also want to point out something that is equally relevant, the fact that the patient population that was studied by our competitor is probably only about 1,500-2,000 out of those 5,000 patients. The patients with C3G, not IC-MPGN, pretransplant, not post-transplant, and adults, not adolescents. Is what portion of their population that would be ideal for their drug overlapping with Apellis? I think if you have this disease and you have serious symptoms, you are going to want to treat this disease with a product that you believe is best going to help the patients. You know, we believe that the convenience aspect will be secondary to that. Can you talk a little bit about what to expect in terms of pricing range? Because this would be a rare disease. It will be priced similarly to what we do with PNH. Okay. I guess doing the math on that, this could be a meaningful contributor to Apellis. In terms of the resources that you would have to devote in getting this launch off the ground, can you talk about the obvious thing about this is a rare disease versus SYFOVRE was, you know, is much bigger. What are some learnings from SYFOVRE that you think you'll be able to apply to this launch to help make it strong from day one? I think the main learnings actually came from PNH, right? I mean, the launch that we did there, we have about 20% overlap between the practices that cover C3G and those that cover PNH, but those cover approximately 70% of the patients with C3G and IC-MPGN. We have a very good existing presence already in the most relevant practices. We believe we're very well set up to launch this product. As we think about, you know, Apellis moving forward, you're very busy focusing on continuing to gain traction with SYFOVRE and you'll be adding C3G. What else should we be thinking about in terms of what the company could be focused on going forward indications-wise? Yeah, thank you for that question. We have a very exciting pipeline, preclinical soon to be clinical that we'll talk much more about in the near future. One program that I would like to highlight is our siRNA program in geographic atrophy. This is a subcutaneous injection with siRNA that brings the systemic C3 levels down by 90%. What we try to do there is we're going to synchronize that subcutaneous injection with the intravitreal injection. Try to do that intravitreal injection every three months instead of every two. Have a convenience benefit and then further improve on the efficacy profile of SYFOVRE. That phase II clinical trial is starting to enroll this quarter. You know, I believe it will really represent the most exciting developmental program within this disease of geographic atrophy when the readout comes, you know, when it's ready. Okay. How are you thinking about potential for other indications in nephrology? We have two phase III clinical trials that are going to start the second half of this year, focal segmental glomerular sclerosis and then delayed graft function. Two, we believe, wonderful indications to still build on what we have right now in the kidney. What was remarkable about C3G and IC-MPGN is what is clearly exquisite target engagement of C3 in the place where it matters. In the glomerulus. That is something we're going to build on with those two additional indications. Are those also indications where others are developing products? Yes, there are. You know, the competition was one of the important aspects, of course, that we took under consideration to understand the MPV and the investment that had to be made. These are two indications where we believe we will be very well positioned. I guess ultimately, when would you be comfortable, because this is a question I get all the time about providing sales guidance? I think maybe, Tim, you answered the question on the earnings call about perhaps you wait until C3G is also launched before getting comfortable providing sales guidance overall. Is that the correct interpretation? That's right. That's right. Yeah, I mean, it feels like it would be odd for us to give sales guidance. First of all, it's been a very challenging period with SYFOVRE to give sales guidance, what with the CRL for the competitor and then with a good date. I mean, it's just, you know, that place of con that Cedric's talking about hasn't really been there where we can, you know, think about guidance. I think the other aspect is I don't know that it makes sense to give guidance on one drug and not the other. I think we need to see how that launch goes and then, you know, get a sense for what's steady state growth in that market and then we can start thinking about it. Okay. I will ask, it's a question that I'm also getting about your competitor providing sales guidance last year as well as this year and metrics that they use versus metrics Apellis uses. One thing that's different is the number that you give for market share, new patient market share for SYFOVRE versus what they're saying their market share is. Can you talk about that? Yeah. So the data set that we use represents, you know, more than 50% of all injections and is retrieved from the point of care. The data that our competitor uses represents approximately 15% and is claims-based data. Also, in the earnings call, it stood out that there was only data provided up to February, you know, which again is indicative of what we know is happening. You know, beyond, I think whether, you know, you believe that one database is better than the other, look at the trends over time, right? I mean, when you think about what's been happening since September up till now, there's a clear takeover that is happening and that favors us. Maybe last question on SYFOVRE, DTC campaign. You launched another commercial with Henry Winkler. How do you correlate those DTC ads with success in terms of, I do not know, patient awareness, getting patients to ask their physicians about the drug, etc.? Yeah. Look, we have early indicators that it's successful. We get to see things like number of patients and number of clicks on websites and things like that. Then there's more long-term data where we can see how it really drives patients into physicians' offices. There's a lag on that, but so far the metrics are suggesting that it's very successful. We actually already, we won some awards. We won an award for the ad as well. I don't know if you want to talk about that. The first one or the second one? The second one. The second one, yeah. Fierce bio had a whole, like a, what was it? Yeah, like a large madness thing for ads and we won it. Yeah, we won it. We have a gigantic cut-out of Henry Winkler in our office. If you walk into our office late at night, there's like, you'd think there's a person there holding up a congratulations Apellis sign. It's actually a cut-out of Henry Winkler. It's a little scary. Okay. So he's going to be your spokesperson for the duration. Maybe one more question on that topic. You did have a little bit of a gap between the first ad campaign and the current one. Why is now the time to invest in that again? I think the timing was very much in sync with, again, kind of that moment of quiet coming into the universe. I think, you know, again, I think I'm personally incredibly proud of how we managed kind of that scare that happened two years ago and how we got through that. Now, again, we want physicians to take a look at the efficacy and understand how important this product is for patients. It seemed like the right time. Okay. With that, we are out of time for today. We look forward to catching up with you guys again on how the SYFOVRE launch as well as hopefully the new launch is going in the early inning. Thanks for coming again. Thanks, guys, for joining. Thank you Tazeen.