William Blair has initiated coverage on Apellis Pharmaceuticals, Inc. (NASDAQ:APLS) and notes that Apellis was the first company to successfully target complement C3, which has led to the approval of two therapies: Empaveli (systemic pegcetacoplan) for paroxysmal nocturnal hemoglobinuria and Syfovre (intravitreal pegcetacoplan) for geographic atrophy secondary to age-related macular degeneration.
William Blair writes that although Empaveli has established a solid position in the PNH market, short-term challenges are anticipated due to the emergence of a new competitor, Novartis AG's (NYSE:NVS) Fabhalta (iptacopan).
Also Read: Apellis Pharmaceuticals' Pegcetacoplan Meets Primary Goal In Late-Stage Study In Patients With Rare Kidney Diseases.
However, Empaveli has a more significant market opportunity in C3 glomerulopathy (C3G) and immune-complex membranoproliferative glomerulonephritis (IC-MPGN), especially following the strong top-line results from the Phase 3 VALIANT study.
William Blair projects that it could receive approval by late 2025, with peak sales estimates for C3G and IC-MPGN reaching $700 million by 2031.
The analyst has initiated the coverage with an Outperform rating and estimates a fair value for shares of $50.
Syfovre received approval in February 2023, while Astellas Pharma Inc's (OTC:ALPMF) (OTC:ALPMY) drug was approved in August 2023. According to the analyst, Syfovre presents a more attractive efficacy profile and a more advantageous label, permitting monthly or bi-monthly dosing and treatment beyond 12 months (although the label for Izervay may be updated to include these options in November).
Nevertheless, the analyst notes that the market is sufficiently large to accommodate multiple blockbuster drugs.
Thus, even though Syfovre has a competitive advantage over Izervay, William Blair believes both medications can thrive in light of the extensive market, significant unmet needs, and the absence of alternative treatments.
With an assumption of only 30% peak market penetration among patients treated by injecting physicians and a consistent rise in referral rates without an increase in diagnosis rates, the analyst projects U.S. peak sales for Syfovre to reach $2.0 billion by 2030.
Price Action: APLS stock is down 0.95% at $27.68 at last check Wednesday.
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