Apellis Pharmaceuticals (APLS) stock fell 3.5% at the end of the trading session Tuesday, after the company released earnings results for its second quarter of 2021. The clinical-stage biotech firm reported revenues of $0.6 million, after not recording any revenues in the prior-year quarter.
The company received a big push in May 2021 with the FDA approval of Empaveli (pegcetacoplan). Empavali treats paroxysmal nocturnal hemoglobinuria (PNH), a rare blood disorder associated with very low hemoglobin levels.
This enabled Apellis to have the first marketed drug in its portfolio, and it’s from the sales of this drug that the company received all of its revenue for the quarter. (See Apellis stock charts on TipRanks)
Needham analyst Joseph Stringer approached Apellis management for additional details and recorded a few key takeaways from the discussion.
An approval for Empaveli as a treatment of PNH is under review in Europe, and is expected to come in the second half of 2021. Stringer anticipates moderate sales for 2021 as reimbursements are finalized, and reiterated his Empaveli sales estimates of $3 million for the third quarter and $9 million for 2021.
Apellis is also developing Empaveli beyond PNH for several other indications. It is being assessed as a monotherapy in a couple of phase III studies called DERBY and OAKS for treating the condition called geographic atrophy. Top-line data from these studies is due in September this year.
Stringer did not change his expectation of a 25-30% potential increase in Apellis share price if both the trials demonstrate approximately 25% reduction in lesion growth with the same safety profile as phase II data.
The analyst said, “We view PNH as a near-term opportunity but believe success in Geographic Atrophy will be the long-term value driver for the stock. We anticipate a positive phase III outcome based on the strength of phase II results and positive KOL feedback. We believe pegcetacoplan has blockbuster potential in Geographic Atrophy, and estimate worldwide peak sales of (approximately) $3.8 billion in 2035.”
He reiterated a Buy rating on Apellis with an $85 price target, which has an upside potential of 42.6%.
Wall Street’s Take
Consensus among analysts for the company is a Strong Buy based on 12 Buys and two Holds. The average Apellis price target of $84.08 implies 40.6% upside potential to current levels over the next 12 months.
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Disclaimer: The opinions expressed in this article are solely those f the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
