Chasing Alexion, Apellis hits the start button for $150M IPO

Apellis abandoned an earlier IPO attempt in 2016.

Flushed with recent clinical trial wins, Apellis has moved quickly ahead with an initial public offering that it hopes will raise $150 million and give it the reserves needed to take its lead complement drug through the next phases of clinical development.

This is the second time Apellis has lined up an IPO, having pulled the plug on an earlier attempt last year which aimed to raise $86 million. The Kentucky biotech, which specializes in drugs that inhibit an immune pathway known as the complement system, says the cash injection should give it operating cash until the first quarter of 2019.

The firm's lead candidate, APL-2, is a complement C3 inhibitor in phase 2 trials for paroxysmal nocturnal hemoglobinuria (PNH) and is vying to take on Alexion’s Soliris (eculizumab), a C5 inhibitor which is currently the only FDA-approved drug for this rare and serious anemic blood disorder.

APL-2 has also chalked up positive phase 2 data in geographic atrophy (GA), an advanced form of age-related macular degeneration (AMD) and a much bigger patient population for the drug, and is in early-stage development for autoimmune hemolytic anemia (AIHA), which has no FDA-approved treatments.

The market opportunity for APL-2 in both AMD and PNH could be sizable, but Apellis acknowledges it has competition pretty much across the board in its target indications. Soliris is on course to reach $3 billion in sales this year, according to Alexion, and the company is already lining up a longer-acting and more potent follow-up that is in phase 3. Several other companies have PNH drugs in the clinic, including Novartis, which has anti-C5 antibody LFG316 in mid-stage testing.

There are no approved treatments for GA or AIHA, but Apellis has a number of rivals with candidates in the clinic. In GA those include lampalizumab, a complement factor D inhibitor being developed by Roche in phase 3 testing, while drugs in development for AIHA include Rigel’s fostamatinib in phase 2.

Apellis is offering 10.7 million shares of common stock at a price of $14 per share, which would raise $137 million up to $158 million if the underwriters—Citigroup, J.P. Morgan and Evercore ISI—choose to take up an additional stock allocation.