Apellis (APLS) Q4 2025 Earnings Call Transcript

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Date

Tuesday, Feb. 24, 2026 at 8:30 a.m. ET

Call participants

• Chief Executive Officer — Cedric Francois
• Chief Financial Officer — Timothy E. Sullivan
• Chief Medical Officer — Caroline R. Baumal
• Chief Commercial Officer — David Acheson

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Takeaways

• Total revenue -- $200 million for the fourth quarter and $1 billion for the full year, including a one-time $275 million upfront payment from the Sobi royalty repurchase agreement.
• Syfovre net product revenue -- $155 million for the fourth quarter and $587 million for the full year.
• Syfovre dose deliveries -- Approximately 102,000 doses delivered in the fourth quarter, with 89,000 commercial doses and 13,000 free goods doses.
• Syfovre injection demand growth -- Total injections grew by approximately 17% year over year.
• Gross-to-net adjustment (Syfovre) -- Adjustments in the fourth quarter were just above the mid-20% range; expectations for 2026 are in the high-20% range.
• Market share (Syfovre) -- Holding steady at 60% in the geographic atrophy (GA) market, as stated by management.
• Empaveli net product revenue -- $35 million for the fourth quarter and $102 million for the full year (U.S. net product revenue only).
• Empaveli market penetration -- Achieved more than 5% market penetration after its first full quarter post-launch in C3G and primary IC-MPGN; management indicated this outpaces typical rare nephrology launches.
• Empaveli cumulative patient start forms -- 267 cumulative patient start forms received as of year-end 2025.
• Payer access (Empaveli) -- 95% of published policies reimbursing to label or with minimal restrictions.
• Operating expenses -- $251 million for the fourth quarter; in line with 2024 on a full-year basis, with modest expected increases in 2026 primarily for pivotal trials and milestones, offset by SG&A reduction.
• Cash position -- $466 million in cash and cash equivalents as of year-end 2025, with management stating this provides "substantial flexibility" to fund the business to profitability.
• Convertible debt -- Approximately $94 million outstanding, maturing in September 2026.
• Milestone payment -- $25 million milestone from Sobi received in Q1 2026 triggered by European Commission approval for Aspaveli in C3G and primary IC-MPGN.
• Phase 3 trials initiated -- Pivotal trials underway for Empaveli in focal segmental glomerulosclerosis (FSGS) and delayed graft function (DGF).
• Syfovre five-year data -- New GALE extension study analysis shows Syfovre delayed geographic atrophy progression by about 1.5 years in patients with nonsubfoveal GA versus sham or projected sham.
• Prefilled syringe initiative -- Clinical study for Syfovre prefilled syringe completed; management targeting regulatory submission in the first half of 2026.
• OCT-F initiative -- OCT-F, an AI-enabled tool for functional benefit visualization in GA, to be made available for research use in retina practices in the second half of 2026.
• Pipeline update -- APL-9099, a base editing FcRn program, targets IND submission in the second half of 2026; Syfovre/APL-3007 combo study top-line data expected in 2027.

Risks

• Full-year Syfovre revenue declined compared to 2024, "largely due to elevated use of free goods," indicating margin and revenue headwinds from patient assistance dynamics.
• Gross-to-net adjustments for Syfovre are expected to rise to the high-20% range in 2026.
• Management noted the need to address $94 million in convertible debt maturing in September 2026, and they are actively evaluating a range of alternatives to address this obligation in a thoughtful and disciplined way.

Summary

Apellis Pharmaceuticals (NASDAQ:APLS) reported that Empaveli's initial performance in C3G and IC-MPGN was fully in line with internal expectations, achieving over 5% U.S. market penetration after the first full quarter and 267 patient start forms, supported by 95% payer coverage to label or with minimal restrictions. Syfovre maintained a 60% GA market share and demonstrated a 17% growth in injections year over year, despite lower annual revenue tied to elevated use of free goods. The company highlighted new five-year GALE data showing Syfovre delayed nonsubfoveal GA progression by roughly 1.5 years, and outlined 2026 launches for practice-enabling innovations including a prefilled syringe and OCT-F functional imaging platform. Pivotal Phase 3 trials for Empaveli in FSGS and DGF have commenced, with pipeline progress marked by a targeted IND submission for APL-9099 and top-line combo data for Syfovre/APL-3007 in 2027. Apellis Pharmaceuticals ended the year with $466 million in cash, planned for modest opex increases, and flagged active management of a $94 million convertible debt maturity in September 2026.

• Physicians and management asserted that the prefilled syringe for Syfovre is "a practice-enabling innovation" aimed at improving workflow and may offer a competitive edge in gaining market share versus rivals.
• Management stated, "Empaveli is on a clear path to blockbuster status" with the potential to reach up to 50% of the approximately 5,000 U.S. C3G and IC-MPGN population at peak adoption.
• The company noted patient pipelines for Empaveli are "that upstream pipeline today is larger than it was before the launch," suggesting sustained physician identification and engagement efforts are feeding new patient starts, even as initial launch bolus subsides.
• David Acheson expects only a "modest" seasonal impact for Syfovre in the first quarter of 2026 due to muted inventory swings and typical seasonal dynamics, with management targeting stable annual revenues and muted quarter-to-quarter variability.
• Exact figures or projections for practice-level adoption of OCT-F or prefilled syringe were not provided, but management stressed imminent availability for research use and regulatory submission, respectively, in 2026.

Industry glossary

• Gross-to-net: The difference between the list price and the net revenue the company actually receives, after accounting for discounts, rebates, and patient assistance costs.
• Free goods: Product doses supplied to patients at no charge, often as part of patient assistance programs, which reduce reported net revenue.
• Patient start form: Documentation signaling intent to initiate therapy for a new patient, used as a lead indicator of new prescriptions in specialty launches.
• OCT-F: Optical Coherence Tomography-Functional, an AI-enabled imaging platform that translates retinal scans into visual functional maps for clinical evaluation of disease impact and therapeutic benefit.
• PFS (Prefilled syringe): A ready-to-inject drug delivery format designed to improve dosing efficiency and convenience in clinical settings.
• IC-MPGN: Immune complex membranoproliferative glomerulonephritis, a rare kidney disease treated by complement inhibition.
• FSGS: Focal segmental glomerulosclerosis, a rare kidney condition targeted in pivotal trials.
• DGF: Delayed graft function, a kidney transplant complication under investigation for Empaveli treatment in clinical trials.
• FcRn: Neonatal Fc receptor, a protein targeted by emerging therapies (such as APL-9099) to modulate IgG antibodies while sparing other serum proteins.

Full Conference Call Transcript

Cedric Francois: Thank you, Eva, and thank you all for joining us this morning. Before turning to our fourth quarter results, I would like to briefly reflect on the progress Apellis Pharmaceuticals, Inc. made over the course of 2025. It was a year of disciplined execution and foundation building for our company. We strengthened our commercial franchises, advanced key programs across our pipeline, and continued to demonstrate the value of our differentiated C3 approach, all while maintaining a strong balance sheet and a clear focus on long-term value creation. These foundations position us well as we move ahead with clear priorities centered on execution, growth, and unlocking the next set of value-creating inflection points for Apellis Pharmaceuticals, Inc.

At our core, Apellis Pharmaceuticals, Inc. is a company focused on complement biology, specifically targeting C3, the central hub of the complement cascade. By intervening at this central point, where all complement pathways converge, we take a fundamentally different approach that enables comprehensive disease control at the root cause while preserving essential immune function. This strategy continues to differentiate us scientifically and commercially, and positions us to address a broad range of serious, complement-driven diseases. Our 2026 focus remains anchored in our three strategic pillars. First, strengthening Syfovre's leadership in geographic atrophy. Second, driving growth with Empaveli across rare kidney diseases, and third, advancing an innovative pipeline that underpins our next wave of growth.

Starting with Syfovre, Syfovre continues to be a resilient and durable business. In 2025, we delivered steady growth in total injections, and we expect Syfovre to remain a stable and meaningful revenue stream through 2026. Last month, co-pay assistance programs at third-party organizations began reopening to new patients. While we do not have visibility into how activity may ramp over time, we are encouraged that patients may be able to gain access to treatment. Looking ahead, we are advancing key initiatives to lay the foundation for accelerated growth in 2027, including a best-in-class prefilled syringe and OCT-F, our AI-enabled approach to visualize the functional benefits Syfovre can provide for patients.

Together, these initiatives are designed to make treatment more tangible, improve workflow, and support broader adoption over time. Turning now to our second pillar, Empaveli. Empaveli is our near-term growth engine, and its launch trajectory reinforces our confidence in its long-term value. Following FDA approval in July for patients with C3G and primary IC-MPGN, the launch has progressed fully in line with our internal expectations, reflecting strong execution and early market receptivity. After its first full quarter on the market, Empaveli achieved more than 5% market penetration, significantly outpacing other rare nephrology launches.

We continue to receive outstanding feedback from the community, with growing appreciation of Empaveli's value proposition following the publication of our data in the New England Journal of Medicine. We believe Empaveli's strong efficacy and safety profile will continue to drive adoption, and that over time, it has the potential to be used by up to 50% of the estimated 5,000 U.S. patient population. Lastly, our third pillar, which is our innovative pipeline. In nephrology, we are building on the momentum of Empaveli and expanding the franchise into new indications, with pivotal trials now underway in focal segmental glomerulosclerosis (FSGS) and delayed graft function (DGF).

In geographic atrophy, we are further bolstering Syfovre's leadership through our next-generation strategy combining Syfovre with APL-3007, designed to enhance efficacy, patient experience, and further differentiate our offerings. We are also excited to advance APL-9099, our category-defining FcRn program. This first-in-class base editing approach has the potential to disrupt a multibillion dollar market and enable a one-and-done treatment paradigm across multiple indications. These programs reflect the breadth, strategic depth, and long-term ambition of our pipeline. With a strong balance sheet and a growing commercial revenue base, we are well-positioned to self-fund our pipeline and drive long-term value through disciplined financial execution. I will now turn the call over to David Acheson for an update on our commercial performance.

David Acheson: Thank you, Cedric, and good morning, everyone. As Cedric highlighted, 2025 reinforced that Syfovre is a resilient and durable business. While full-year revenue was modestly down compared to 2024, largely due to elevated use of free goods, the underlying demand remains strong with total injections growing approximately 17% year over year. Syfovre continues to lead the GA market. Physicians and patients value its differentiated profile, including robust efficacy and the flexibility of dosing as few as six times per year. Payer coverage remains strong with preferred status across a broad range of plans. As the GA market continues to evolve, we see meaningful opportunity for Syfovre and are focused on three priorities to support continued expansion and long-term growth.

First, sharpening our field engagement through physician segmentation, refined messaging, and a greater emphasis on early-career retina specialists. Second, reinforcing our data leadership in GA. Syfovre is supported by the most extensive clinical and real-world evidence base in the category, anchored by five-year GALE data. And third, advancing innovation with a best-in-class prefilled syringe and OCT-F. Together, these initiatives are foundational to supporting broader growth in 2027 and beyond. Turning to Empaveli, we are very pleased with the progress in the C3G and primary IC-MPGN launch, with early uptake fully consistent with our expectations. Following its first full quarter post launch, Empaveli achieved more than 5% market penetration.

This level of early adoption is particularly notable in nephrology, a specialty known for conservative prescribing behavior and high evidentiary thresholds. As of year-end 2025, we received 267 cumulative patient start forms, reflecting strong early demand and a growing patient pipeline. Demand is being driven by broad engagement across the nephrology community and supported by favorable payer access, with 95% of published policies reimbursing to label or with minimal restrictions. Physicians consistently highlight Empaveli's compelling efficacy profile along with the convenience and ease of use of its on-body autoinjector and twice-weekly dosing. With its broad label, Empaveli is the only approved therapy for approximately two-thirds of patients with C3G and primary IC-MPGN in the U.S.

As the launch has progressed, we have expanded meaningfully across the prescriber community, increasing both the breadth and depth of engagement. Over time, physicians are gaining experience in treating additional patients, reflecting growing confidence as the launch matures. Importantly, this execution has translated into a strong patient pipeline. Early identification and engagement efforts over the first six months have positioned us well for continued growth, and we remain focused on broadening and deepening that pipeline as the market develops. As we look ahead, our 2026 launch priorities are focused on three clear areas. First, strengthening patient identification through targeted medical education to both improve diagnosis and drive urgency around earlier treatment. Second, expanding engagement with prescribing physicians.

We began the launch with a disciplined focus on our top 20 accounts, which represent more than 30% of the overall market and have accounted for approximately one-third of patient start forms. We are now systematically broadening engagement across additional tiers through targeted field activity and peer-to-peer education. And third, deepening adoption across patient segments. We continue to see strong interest from pediatric and post-transplant patients, with growing opportunity in the adult population as the treatment paradigm shifts and clinical practice continues to evolve. Overall, the launch is progressing very well. We entered 2026 with strong momentum, and we believe that strength will continue through the year with some quarter-to-quarter variability.

We believe Empaveli is on a clear trajectory to blockbuster status and that it could ultimately be used by up to half of the U.S. C3G and primary IC-MPGN patient population. With that, I will turn the call over to Caroline R. Baumal.

Caroline R. Baumal: Thanks, David. I will begin with Syfovre. As the only approved therapy that targets C3, Syfovre addresses the central biology driving geographic atrophy, which continues to differentiate its clinical profile. In the fourth quarter, we announced new five-year data from a post hoc analysis of the GALE extension study, which showed that Syfovre delayed progression of geographic atrophy by approximately 1.5 years in patients with nonsubfoveal GA when compared to sham or projected sham. We look forward to presenting the full five-year dataset at the Macula Society later this week as one of our eight oral presentations at the conference. Looking ahead, we are advancing two initiatives designed to support clinical decision-making and real-world use.

First, our prefilled syringe intended to improve efficiency in retina practices. The clinical study is complete, and we are working toward a submission in the first half of this year. Second, we continue to make important progress with functional OCT, our AI-enabled approach to visualizing functional benefit in GA. We recently shared data at the Angiogenesis meeting earlier this month, and plan to make the tool available for research use in retina practices in the second half of this year. In parallel, we continue to advance the phase 2 study of Syfovre in combination with APL-3007 as a next generation designed to more comprehensively block complement activity in the retina and choroid. We expect to share top-line data in 2027.

Now turning to Empaveli in C3G and primary IC-MPGN. Physician feedback and the recent New England Journal of Medicine publication continue to reinforce Empaveli's differentiated profile. As the only C3-targeting therapy, Empaveli has demonstrated the trifecta of efficacy outcomes, with direct clearance of C3 deposits translating into reduced proteinuria and stabilization of kidney function. These data reinforce our confidence in Empaveli's mechanism and its potential to redefine treatment in complement-mediated kidney disease. We also recently initiated pivotal trials with Empaveli in FSGS and DGF, two additional high unmet-need kidney indications. Both conditions are strongly linked to complement activation and currently have no FDA-approved therapy. Finally, I will briefly touch on APL-9099, our FcRn program.

This first-in-class base editing approach is designed to reduce IgG levels while preserving albumin, which we believe addresses important limitations of existing FcRn therapies. We expect to submit an IND in the second half of this year and look forward to sharing more details as the program progresses. I will now turn the call over to Timothy E. Sullivan.

Timothy E. Sullivan: Thank you, Caroline. I will now walk through our financial results. Additional details are included in this morning's press release. Total revenue for the fourth quarter and full year 2025 was $200 million and $1 billion, respectively. As a reminder, full year 2025 revenue includes the one-time $275 million upfront payment from the Sobi royalty repurchase agreement. We reported Syfovre net product revenue of $155 million for the fourth quarter and $587 million for the full year 2025. During the fourth quarter, we delivered approximately 102,000 Syfovre doses to physician offices, including approximately 89,000 commercial doses and 13,000 free goods doses. As previously discussed, reported revenue was meaningfully impacted due to elevated free goods utilization through 2025.

Looking ahead, we remain committed to supporting patient access, while recognizing that free goods utilization may evolve over time as third-party programs resume activity. Turning to gross-to-net, Syfovre adjustments in the fourth quarter trended just above the mid-20% range. In 2026, we expect gross-to-net to be in the high-20% range, reflecting the normal stepwise evolution of the buy-and-bill market. Importantly, based on our current pricing strategy, we expect net price to remain relatively stable through 2026, and we remain confident in our access position. As we exited 2025, we took a disciplined approach to inventory management, and we are comfortable with the current channel levels.

We therefore expect a modest inventory reduction in the first quarter alongside typical seasonal dynamics, including Medicare reverifications. Overall, Syfovre remains a meaningful and durable foundation for Apellis Pharmaceuticals, Inc. In 2026, we are focused on disciplined execution, while advancing initiatives that position the business for renewed growth in 2027 and beyond. Moving to Empaveli, we reported U.S. net product revenue of $35 million for the fourth quarter and $102 million for the full year 2025. As David noted earlier, the launch continues to progress very well, and based on current trends, we believe Empaveli is on a clear path to blockbuster status. For operating expenses, we continue to maintain a highly disciplined approach to cost management.

Operating expenses were $251 million in the fourth quarter, compared with $239 million in the same period last year. For the full year 2025, operating expenses were in line with our expectations and consistent with 2024 levels. In 2026, we expect operating expenses to be modestly higher, with incremental investment in the newly initiated pivotal trials for FSGS and DGF, as well as certain milestone payments, largely offset by a decrease in SG&A reflecting ongoing operating efficiency and resource optimization. We ended the year with $466 million in cash and cash equivalents, which we believe provides us with substantial flexibility and the resources to fund the business to profitability.

As a reminder, Sobi recently received European Commission approval for Aspaveli in C3G and primary IC-MPGN, which triggered a $25 million milestone payment to Apellis Pharmaceuticals, Inc. during the first quarter of this year. We also remain focused on prudent capital structure management. We have approximately $94 million of convertible debt outstanding which matures in September, and we are actively evaluating a range of alternatives to address this obligation in a thoughtful and disciplined way. I will now turn the call back over to Cedric Francois.

Cedric Francois: Thank you, Tim. As we move through 2026, our priorities are clear. We are focused on disciplined execution across our commercial portfolio, advancing initiatives that support long-term growth, and continuing to deliver meaningful impact for patients. Empaveli is gaining traction in C3G and primary IC-MPGN, while Syfovre provides a durable foundation as we position the franchise for its next phase of growth. Supported by a strong balance sheet and financial rigor, we are operating from a position of strength and remain confident in our ability to create durable value for patients and shareholders. We will now open for questions.

Operator: If you would like to ask a question, please press star 11 on your telephone. To remove yourself from the queue, you may press star 11 again. We ask that you please limit yourself to one question and one follow-up to allow everyone the opportunity to participate. Please standby while we compile the Q&A roster. Our first question comes from the line of Jonathan Miller of Evercore ISI. Please go ahead, Jonathan.

Jonathan Miller: Hi, guys. Thanks so much for taking my question, and congrats on the progress throughout 2025. I would like to use my one question to ask about the Empaveli launch as we get into 2026. You mentioned opening to broaden the accounts there and improve patient identification, diagnosis, and all of that. But I noticed that one of the things that you did not mention when you were listing the indications where there was strong growth potential was IC-MPGN, where you have a differentiated label but it has historically been a little bit more challenging to find those patients.

Can you talk a little bit about the breakdown of different indications throughout 2026—where you think the low-hanging fruit is, where we can see real growth in the near term, and what it will take to break open some of those indication subsets that are a little bit tougher to diagnose and get on treatment?

Cedric Francois: Thank you so much, Jonathan. Great hearing you, and thank you everyone for joining. Empaveli is on a clear path to blockbuster status, and as you correctly outlined, there is not just IC-MPGN. There is also the fact that in the VALIANT study, we studied Empaveli in the pediatric population as well as in a post-transplant setting. Now, specifically as it relates to IC-MPGN, we believe that the epidemiology in total between the two indications is approximately 5,000 patients in the U.S., split more or less 50/50 between those two indications.

While we are not providing exact breakdowns as to where in the populations things sit at the moment, it is worth noting that in the pediatric population, IC-MPGN, and the post-transplant segment, we see important pickup and differentiation, and that, of course, contributed to achieving more than 5% penetration after the first full quarter in Q4. That contributes to our confidence of reaching up to 50% of those 5,000 patients at peak.

Jonathan Miller: Thanks, Cedric. But if you are going to see 50% penetration at peak and IC-MPGN is 50% of the U.S. population, I am asking whether you are going to see equivalent penetration across those different subpopulations, those different subindications, by the end of the day, or are there places that are going to remain more difficult to penetrate?

Cedric Francois: It is a little early to say that exactly at this moment in time. It is also important to note that there is quite a bit of overlap between these two indications. There is not a hard separation between them, in the sense that you can have a patient with a biopsy one day that is leaning more towards C3G, and on another biopsy, can lean more towards IC-MPGN, which is why it is so important to have covered all phenotypes of these diseases in the clinical trials that we ran. It is a little bit too early to provide more specifics on that.

Operator: Our next question comes from the line of Anupam Rama of J.P. Morgan.

Anupam Rama: Hey, guys. Thanks so much for taking the question. You have the five-year GALE data this Friday that you highlighted. What would you have us focus on within these data? Thanks so much.

Cedric Francois: Thank you so much, Anupam. The important benefits and the continued safety profile that Syfovre provides to patients with geographic atrophy. It is by far the largest dataset ever generated in geographic atrophy, and what we found through the course of following these patients for a full five-year period is that patients who are on treatment for five years can save as much as 1.5 years of tissue. As I think you can appreciate, that is an enormous benefit to a 70- or 75-year-old individual who, in the twilight of their life, depends so much on their vision. We are incredibly proud and incredibly happy with the data that we have generated and look forward to presenting it on Friday.

Caroline, would you like to add something?

Caroline R. Baumal: Thank you, Cedric. What will be meaningful for a retina physician is that we have this extended trial with five years of data that continues to show increasing effects over time, and that retina tissue can be meaningfully saved. These findings might lead to earlier treatment for patients with geographic atrophy. We really look forward to presenting this data.

Anupam Rama: Thank you.

Operator: Our next question comes from the line of Tazeen Ahmad of Bank of America. Your line is open, Tazeen.

Tazeen Ahmad: Great. Thanks for taking my question. I wanted to follow up on that 50% penetration for Empaveli. How long do you think it is going to take to reach that? I know that a big point of discussion among investors is the ramp of your launch. Is it going to be more steady, or could it accelerate and become more steep? Any thoughts you can provide on patient finding efforts and what you think realistically the time to onboard patients will take would be helpful. And then can you talk about what the competitive dynamics are so far relative to how doctors are viewing Empaveli versus Tavneos?

What are the types of patients that they might still be waiting to see if Empaveli might be better than relative to Tavneos? Thank you.

Cedric Francois: Thank you so much, Tazeen. As it relates to the ramp, I think you correctly outlined that we should expect a steady ramp and steady growth, as is quite typical in rare diseases. We have seen that happen in the past couple of months and expect that to continue. Competitively, as already outlined when Jonathan asked the question, there is clear differentiation that we have and the unique positioning without competition right now in the pediatric segment as well as in IC-MPGN, which is a huge advantage.

Also, in the pediatric population, the disease tends to progress more quickly, and what you see in the field based on what we have seen since the launch is that the appreciation for the efficacy and safety profile of the drug really stands out. Also in the post-transplant segment, that is a very important place. The majority of patients with these diseases will have a relapse. This is a genetic condition at the end of the day.

Operator: Our next question comes from the line of Timur Ivannikov of Cantor. Timur, your line is open.

Timur Ivannikov: Hi. Thank you. This is Timur on for Steven Seedhouse. For the Empaveli launch, I think you mentioned strong momentum in C3G in 2026 with quarter-to-quarter variability. Could you talk about some of the variability factors, and do you expect to provide start forms again at some point or any other form of guidance? Thank you very much.

Cedric Francois: Thank you so much, Timur. I will hand the question over to David Acheson.

David Acheson: Good morning. Thank you for the question. On the variability, it is an ultra-rare disease. It is important to note that you will see an influx of potential patients coming in on start forms. That does vary week over week, month over month. It is something that we need to pay attention to, but I feel very good about the momentum that we came into 2026 with from the launch last year on the strength of the product and the patients that we are getting on the brand, which is very positive. Could you repeat the second part of your question for me?

Timur Ivannikov: Yes. I was just wondering about the start forms or any other type of guidance for the product.

David Acheson: Moving forward, we will continue to report on revenues for sure and start forms, but we are not going to give any additional guidance on start forms beyond what we had in the third to fourth quarter.

Operator: Our next question comes from the line of Yigal Dov Nochomovitz of Citigroup. Yigal, your line is open.

Yigal Dov Nochomovitz: Hi. Great. Thank you. Could you talk a bit about the prefilled syringe? I want to get a sense of how much it matters for the retina doctors in terms of the practice flow and efficiency. When you say renewed growth in 2027 for Syfovre, is the driver behind this statement the launch of the PFS? And then more specifically on the practice dynamics, since the space is very limited for the physicians for the fridges to store the drug, is there an advantage to the PFS in terms of practice dynamics in storing the drug with that presentation? Thank you.

Cedric Francois: Thank you, Yigal. Those are excellent questions, and the PFS will make a huge difference for us. We have our Chief Medical Officer with us here, Caroline, to speak a little bit more to that.

Caroline R. Baumal: Thank you. The prefilled syringe is really a practice-enabling innovation, offering convenience and efficiency to retina physicians. From my experience as a clinician and from being heavily involved in development of our prefilled syringe, this is going to support the ease of clinical use in patients with geographic atrophy. We think this will be transformative for physicians and their patients. When it comes to specifics about the design, retina physicians provided significant input into how we designed this, including the box and the complete package, and will be very pleased with how it fits into refrigerators.

We also have other things that will help be transformative for Syfovre with renewed growth, and that is functional OCT, which was mentioned on the call.

Operator: Our next question comes from the line of Salveen Richter of Goldman Sachs. Please go ahead, Salveen.

Salveen Richter: Good morning. Thanks for taking my question. I was wondering if you could provide any further color on the recent improvement in co-pay dynamics for Syfovre and how you think about the quarter-over-quarter cadence of sample use and the sales trajectory as you input this into your trajectory.

Cedric Francois: Thank you so much, Salveen. Tim, can you elaborate on that?

Timothy E. Sullivan: Sure. As you probably saw, Salveen, the patient assistance organization is open for reimbursement for co-pay assistance with geographic atrophy patients. At this time, we do not really have any sense of what that means in terms of dynamics from a free goods perspective. As you recall, last year we had 12% to 14%, fluctuating on a quarterly basis. What this represents is an important advance for the patients who have been unable to pay for their treatment in geographic atrophy.

Operator: Our next question comes from the line of Colleen Kusy of Baird. Colleen, your line is open.

Colleen Kusy: Great. Good morning. Thanks for taking our questions. Congrats on all the progress. I realize the nephrology phase 3 studies are just recently up and running now, but any color you can provide on the expectations for enrollment there? Are any of these centers with preexisting experience with Empaveli? How might that enrollment pan out?

Cedric Francois: Thank you so much, Colleen, for that question. We are very excited about these two phase 3 clinical trials in FSGS and DGF, where we think Empaveli has the potential to make a huge difference, as it did in C3G and IC-MPGN. It is a little early to give projections on what the enrollment will look like, but the excitement around continuing the trajectory in the kidney is very strong. What really stood out from the VALIANT study is the exquisite target engagement and the control of the complement pathways that we see in the glomerulus, which we believe will translate into similar efficacy profiles in these conditions.

Colleen Kusy: Great. Thank you.

Operator: Our next question comes from the line of Philip Nadeau of TD Cowen. Your line is open, Philip.

Philip Nadeau: Good morning. Thanks for taking our question. We wanted to focus on Syfovre revenue trends for Q1 2026. Tim, putting your comments together, it sounds like you expect typical seasonal factors for Q1. Last year, sales were down $37 million quarter over quarter in Q1 2025 versus Q4 2024, although there was a big impact of free product in that downtick. How will the seasonal factors in 2026 compare to 2025? And then more generally for 2026, it sounds like you are suggesting relatively stable revenue for Syfovre. I want to make sure I understand that we should be modeling something for full year 2026 similar to full year 2025.

Timothy E. Sullivan: Sure. There are a couple of seasonal dynamics in the first quarter, one of which we tried to manage a little bit. As you will recall, last year we had a fourth quarter spike in revenue that was the result of some inventory build across the channel, including at physician offices as well as at the distributor. We really did our best to manage that this year. We think there may be a bit of a modest swing in the first quarter, but much more muted than last year. We also typically have some seasonal dynamics like weather and reverification in the first quarter.

Bearing that in mind, we think across the year that is the main seasonal quarter for us. There is a little bit at the end in the fourth quarter, but as you rightly point out, we expect a modest cadence to growth over the course of the year.

Philip Nadeau: That is helpful. Thank you.

Operator: Our next question comes from the line of Annabel Eva Samimy of Stifel. Your line is open, Annabel.

Jayed Momin: Hi. This is Jayed on for Annabel. I just want to revisit the type of doses delivered. It was flat quarter over quarter, I think you mentioned due to some seasonality, but there was an improved split favoring commercial doses, diagnostic of the co-pay assistance funds coming back. Do you expect that split to be more favorable towards commercial doses going forward in 2026?

Timothy E. Sullivan: Thanks for the question. What we really felt happened in the fourth quarter was a touch of seasonality. When you look at the amount of doses we had, it was 89,000, and there are roughly 90 days in a quarter. We had a longer holiday stretch that may have impacted things. It was not a significant change from a commercial doses perspective in the context of that seasonality in our view. From the free goods perspective, we saw a range of 12% to 14% over the course of 2025 that bounced around, and this was pretty much in line with what we expected in the fourth quarter.

As you may recall, sometime in the third quarter, the patient co-pay assistance organization was open for existing patients, and that may have led to a small downtick in the total free goods in the fourth quarter, but it is really hard to say.

Jayed Momin: Got it. Thank you.

Operator: Our next question comes from the line of Eliana Merle of Barclays. Please go ahead, Eliana.

Eliana Merle: Thanks so much for taking my question. Two for me. What are you looking to see in the phase 2 data of Syfovre in combo with APL-3007 next year, and how are you thinking about what would be meaningful there? And then just a clarification on the C3G/IC-MPGN comments. The 50% penetration that you mentioned—sorry if I missed this—but is this the base case that you will treat 50%, or are you saying that half the population will become challenging to treat? Just trying to understand that 50% comment. Thanks for the color.

Cedric Francois: Thank you, Eliana. Great hearing you. The GALE combo study is a study we are really excited about. We are doing a subcutaneous injection with an siRNA product against C3, and that lowers the systemic levels of C3 by 90%. That translates to lowering the C3 levels in the eye as well and gives a stoichiometric advantage to Syfovre to do its job. We believe that this study, if successful, will allow us to treat every three months instead of every two months, and to increase the efficacy, which is already important with Syfovre, to numbers well above that. What “well above” means we will define at a later time point.

It is a really exciting study for us where I think we can again change the paradigm in geographic atrophy as we have done before. As it relates to the C3G and IC-MPGN populations, we said we believe that up to 50% of the epidemiology would be patients that could end up being treated with Empaveli. What is important in that context is that we are very good at having a conservative estimate of the epidemiology. We had more than 5% penetration in the fourth quarter, which means that we had a very strong launch—among the strongest launches in rare diseases—and maybe a conservative epi on our side or a combination of both.

We feel very good with where Empaveli is headed, with what we did in Q4, and with the trend that we continue to see as this launch progresses.

Eliana Merle: Great. Thanks so much.

Operator: Our next question comes from the line of Lachlan Hanbury-Brown of William Blair. Please go ahead, Lachlan.

Lachlan Hanbury-Brown: Hey, guys. Thanks for the question. For Empaveli, you have previously talked about there being an initial bolus of patients, and then it settles down into more of a steady state—monthly or quarterly growth in new patients. Where are you with that? Are you through that bolus and into the steady state now, or are you still working through some of that initial bolus of patients and maybe you reach steady state later this year?

Cedric Francois: Thank you, Lachlan. I will hand that over to David to answer.

David Acheson: Good morning. Thanks for the question. As we talked about last year in the launch through Q4, that bolus of patients typically hits early in the launch and get on product shortly after the launch. We saw that happen in the fourth quarter, which was great to see. Now we are at that steady-state place that we talked about in prepared remarks and what Cedric mentioned earlier. I am confident in the continued steadiness of what we are going to see moving forward.

Lachlan Hanbury-Brown: Good. Thanks.

Operator: Our next question comes from the line of Judah C. Frommer of Morgan Stanley. Please go ahead, Judah.

Judah C. Frommer: Hi, guys. Thanks for taking the question. On the commentary around the ability to fund yourselves through to profitability, how could the pipeline impact the timing and trajectory of that—specifically APL-9099 and APL-3007? What are the pushes and pulls there that could move that profitability closer or further out? Thanks.

Timothy E. Sullivan: Thank you, Judah. That is a great question. At least for the moment, we have incorporated all of that into our thinking when we talk about the fact that we may have a small increase in total operating expenses this year. As you will see, 2024 and 2025 were pretty flat overall. We may have a small increase over the course of this year with our FSGS study and our DGF study really ramping up, and then some of these new programs that you mentioned, like the base editing program, coming online towards the end of the year in terms of potential larger cost structure.

Ultimately, we have been pretty good about managing our operating expenses, and it really comes down to the revenue growth that will make that happen. We look at the world, at least today, from an operating expense and net revenue perspective, and if you add back stock-based compensation, we have been pretty close to an operating adjusted EBITDA neutral level over the last year. We expect that to come more into focus over the course of this year.

Operator: Our next question comes from the line of Douglas Dylan Tsao of H.C. Wainwright. Your line is open, Douglas.

Douglas Dylan Tsao: Hi. Good morning. Thanks for taking the question. On Syfovre, David, a couple of questions. You indicated there was an initiative to help patients end up on the right plan, which improves their coverage outside of free goods. As you come into the new year, have you seen meaningful progress on that? And then on the free goods, are you seeing those patients typically get dosed with free goods and then, if they cannot get coverage or patient assistance, they drop off? Or are you seeing persistence? I am trying to understand how patients are coming in and identification for the market. Thank you.

Cedric Francois: Thank you, Doug. David will answer the question on Syfovre, and I will then talk a little bit about the free goods.

David Acheson: Thanks for the question, Doug. On the reverification piece and patients coming over on insurance plans and what we did last year, we put a lot of effort in last year with our field reimbursement team to make sure that we can help offices get educated on which plans would be specific to patients that have a gap, where they could not get covered for geographic atrophy treatment or specifically Syfovre. We did a lot of work on that.

Our Apellis Assist, which is our hub, has also been integral in making sure education to both the patients and the offices during the reverification period of their insurance—which happened in the fourth quarter, coming into this year—helps them understand where they have opportunities for treatment benefit and payment. All of that happened coming into this year, and the reverification process is winding down. It has been relatively smooth. I cannot tell you how many patients actually changed plans or moved over, but we did what we could to continue to educate so people had access to additional information.

Cedric Francois: Thank you, David. As it relates to the free goods, I want to highlight something that is really important, and that is that in 2025, we made a deep commitment as a company to support the retina practices to deal with a lot of patients being in a position where they could not afford the co-pay on their products and to make sure that these patients would not go without treatment. That is our medical commitment to patients, and that is what we did throughout the year last year and what we will always continue to do when it is needed. That is really important and will continue to be important for us.

Within the context of NextSource as well, it is hard to overstate how impactful the disruption was on the workflow in the retina practices when this occurs. That is something that needed to find a new place of settlement that was important. During that period, there was inevitably a lowering of how many new patients would start on treatment with geographic atrophy because within these retina practices, that is easy to postpone. That dynamic is also something that you should expect to see change over time.

What is really important and gratifying to see right now is that within the retina world, we are starting to find a new cadence and a new place of stability after what was a very difficult year for these physicians and patients.

Douglas Dylan Tsao: Great. Thank you, Cedric, and it is great to hear about the commitment to providing drug convenience.

David Acheson: Thank you, Doug.

Cedric Francois: Great hearing you.

Operator: Our next question comes from the line of Derek Archila of Wells Fargo. Your question, please, Derek.

Derek Archila: Good morning, and thanks for taking the questions. You made some comments on the patient pipeline for Empaveli in C3G and IC-MPGN. What level of visibility do you have there? Is it as granular as understanding where the patients are at certain sites and outreach to those patients? And then just a second question on PFS. Is it more about expanding the market, or is it also share gains against the other competitor? Thanks.

Cedric Francois: Thank you so much, Derek. As it relates to the pipeline, I think that is one of the more gratifying aspects of the launch that we have seen. First, of course, there was the epidemiology, which, as you all know, was difficult to estimate, and we feel that we really hit the bull's-eye in terms of estimating that—and arguably conservatively estimating that. Then, of course, we are having one of the best rare disease launches in the kidney with that penetration within the first full quarter. But then, as you mentioned, also the pipeline.

If you take the number of patients that we actually identified, which then flow into start forms and from start forms into being on treatment—that upstream pipeline today is larger than it was before the launch, in spite of many of these patients now having transitioned to start forms and being on full treatment. That tells us that we got the epi right, we continue to identify these patients, and we expect this launch to be one of steady growth. As it relates to your second question with the prefilled syringe, I think it will be a very important driver of share.

We have plenty of examples from the wet AMD space with anti-VEGF products—it has been proven over and over again that having a prefilled syringe on the market makes a very important competitive advantage for a product. That is one that we are working towards. Of course, we expect our competitor at some point to come out with a prefilled syringe as well, but right now we have a head start that we are very happy with and that will allow us to position ourselves well. As it relates to share, it will also make a difference.

The fact that you fit better into the workflow of the retina practice makes it much easier for physicians to treat these patients and makes it much easier, frankly, for physicians to try the product. Instead of having to draw from a vial through a filter needle into a syringe, you take it out of the fridge and you try it. These are important differences. Caroline, if you want to elaborate on that, please do.

Caroline R. Baumal: Yes. This is a real innovation and will be highly meaningful to physicians to have this way to treat their patients efficiently. From my personal experience and what I have heard from colleagues, I think this will help to expand the market for geographic atrophy.

Cedric Francois: Thank you, Caroline. It is worth noting that the prefilled syringe that we have—from a CMC perspective and from a quality perspective—has been spectacular for us and outpaced our own high internal expectations. We are really happy not just with the pace at which we are bringing it to the market, but also with the quality of the prefilled syringe.

Derek Archila: Great. Thanks very much.

Operator: Our next question comes from the line of Ryan Phillip Deschner of Raymond James. Please go ahead, Ryan.

Ryan Phillip Deschner: Hi. Good morning. This is Anthony on for Ryan. Can you walk us through how retina specialists can potentially use OCT-F in their practices, how this could increase the size of the GA market, and when you anticipate having appreciable amounts of real-world OCT-F data for analysis? If possible, I have a follow-up.

Cedric Francois: Thank you so much. We are touching on Caroline's favorite subject here. For those on the call not familiar with OCT-F, OCT-F is functional OCT. It is a technology that we developed in collaboration with the University of Bonn in Germany, where we used what is the largest dataset of microperimetry data ever generated in the retina to take an OCT and translate an OCT image into what a real functional mapping of the retina is—in other words, what the retinal sensitivity is in a patient across the retina. What really stands out when you analyze patients with geographic atrophy over time is the impressive loss of retinal sensitivity that these patients experience.

From a timing perspective, what you should expect to see this year—and it started at Angiogenesis two weeks ago—is that we will redefine for retina specialists and for family members of patients what it means to have this disease. Why is that so important? Because right now, a lot of people believe that geographic atrophy happens on the border of a lesion, and that is not the case. It is really a panretinal neurodegenerative condition. We can now image that, and commensurate with that, we can image and quantifiably visualize what the benefit is of being on treatment with Syfovre.

In the first step this year, we will be focused on raising the awareness around how impactful geographic atrophy is on patients. Then it becomes our mission to make this available in the retina practice so that a physician, in a one-on-one interaction with the patient, can do that analysis, assess the patient, and track what the benefit is of being on treatment with Syfovre to that patient. Caroline is in love with this technology, speaks about it at every retina conference, and maybe she wants to add a couple of words.

Caroline R. Baumal: Physicians are really excited for this technology—finally, a way to link structure to function. This was shown at our recent presentation at Angiogenesis, and I had multiple people reaching out to me after. This will help with earlier diagnosis of GA, it will help physicians support the patient's journey, and it will help physicians better understand this disease. We expect this to support adoption of Syfovre, the currently approved agent with every-other-month dosing, support their use in patients, and help keep patients on their treatment schedule by showing them and their family members how they are doing. We also hope that it helps highlight other diseases, including wet AMD and other things that we are evaluating as a research tool.

Ryan Phillip Deschner: Thank you very much. Thank you for the in-depth explanation.

Operator: Our next question comes from the line of Douglas Macpherson of Mizuho. Please go ahead, Douglas.

Douglas Macpherson: Hi there. Good morning. Thanks so much for taking my question. I am interested in the competitive dynamics of the market. Firstly, are you seeing the complement inhibitor class to treat GA hold steady or perhaps grow modestly? And I think you are holding pretty solid at 60% market share. As far as new patient starts, what proportion are you seeing versus the competitor? Have you seen any impact of the five-year GALE update in November on new patient starts or on compliance? Thank you.

Cedric Francois: Thank you, Doug. Good hearing from you. As a class, it is hard to believe it is still the early days of what can be done for patients with geographic atrophy. With the differentiation of our product and the enormous amount of data that we have generated, including over the full five-year period, we are really well positioned to continue to shine competitively. I will hand it over to David Acheson to talk a little bit more about market share.

David Acheson: You are correct—we are holding steady at 60% market share, which we are confident in, and we feel really good about where we are coming into 2026. We are really confident in the competitive strength that we have, including the GALE data that came out this week. Nobody else has that data, and it is a big strength for us to have that kind of data with the patients in the long-term study. Our focus is really being disciplined on execution and continuing to innovate with what we are doing with the brand, and to continue that leadership reinforcement moving forward within the space.

The market share is part of that, but driving innovation will continue to drive uptake, market growth, and our share growth as well.

Operator: I would now like to turn the call back to Cedric Francois for closing remarks. Sir?

Cedric Francois: Thank you very much, and thank you all for your thoughtful questions. We look forward to updating you on our progress, and I believe that we are speaking with many of you later today as well. Thank you so much, and I hope you have a great rest of the day.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

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