Apellis Pharmaceuticals, Inc. (Nasdaq: APLS), today announced
that it has entered into a non-dilutive, senior secured credit
facility with Sixth Street, a leading global investment firm, of up
to $475 million, with approximately $375 million funded at close.
Apellis can draw down an additional $100 million under the facility
at the company’s option prior to September 2025, subject to
satisfaction of certain conditions. Additionally, the Sixth Street
agreement also permits Apellis to access $100 million through a
separate third-party working capital facility.
Apellis used the majority of the net proceeds to buy out the
existing SFJ Pharmaceuticals development liability for
approximately $326 million. This buy out eliminates $366 million in
payments owed to SFJ through 2027, including approximately $200
million through 2025. Net proceeds to Apellis at closing will be
approximately $32 million following the buy out of the SFJ
Pharmaceuticals development liability, and fees and expenses
associated with the transaction.
“With this transaction, we believe we are uniquely positioned to
fund our core operations to positive cash flow without the need to
access the capital markets. This marks a pivotal milestone for
Apellis,” said Tim Sullivan, chief financial officer of Apellis.
“Sixth Street is one of the top capital providers within the life
sciences sector. Executing this type of deal with market-leading
economic terms underscores the quality of our business and the
aligned confidence in the opportunities that we have to create
meaningful, long-term shareholder value.”
“We are proud to be supporting Apellis as it successfully
commercializes two life-changing medicines. We are particularly
enthusiastic about SYFOVRE® (pegcetacoplan injection), which in its
first year has already helped many people living with geographic
atrophy in the U.S. and has the potential to benefit millions of
patients worldwide,” said Jeff Pootoolal, partner at Sixth Street.
“We greatly value our partnership with the Apellis team and look
forward to continuing to help them drive further growth and to
realize their commercial and development goals.”
The new senior secured credit facility matures on May 13, 2030,
and bears interest at an annual rate equal to the 3-month Secured
Overnight Financing Rate (SOFR) + 5.75% (subject to 1.00% floor),
with certain additional fees and prepayment terms. There are no
scheduled amortization payments during the term of the facility,
with all principal due on the maturity date. The credit facility
obligations are secured by substantially all assets of Apellis, and
the credit facility includes certain affirmative and negative
covenants consistent with a facility of this type.
As of March 31, 2024, Apellis had cash and cash equivalents of
$325.9 million.
TD Cowen acted as financial advisor and Wilmer Hale served as
legal advisor to Apellis. Proskauer Rose LLP acted as legal
advisors to Sixth Street.
About SFJ Pharmaceuticals Collaboration
In February 2019, Apellis entered into a development
collaboration with SFJ Pharmaceuticals, a global drug development
company backed by Blackstone Life Sciences and Abingworth, to
support the development of pegcetacoplan for the treatment of
patients with paroxysmal nocturnal hemoglobinuria (PNH). Under the
SFJ agreement, SFJ paid Apellis a total of $140 million to fund the
Phase 3 program for pegcetacoplan in PNH. Following regulatory
approvals of pegcetacoplan for PNH by the U.S. Food and Drug
Administration and the European Medicines Agency in 2021, Apellis
was obligated to pay SFJ a total of $460 million in pre-determined
annual payments on the anniversaries of each of the regulatory
approvals. Apellis has paid SFJ a total of $94 million as of March
31, 2024.
About Sixth Street
Sixth Street is a global investment firm with over $75 billion
in assets under management and committed capital. Sixth Street uses
its long-term flexible capital, data-enabled capabilities, and One
Team culture to develop themes and offer solutions to companies
across all stages of growth. Sixth Street Healthcare and Life
Sciences finances the development and commercialization of
innovative therapeutics and invests in healthcare technology
companies across all stages of growth. Investments in the sector
include Arsenal Biosciences, Biohaven, Blueprint Medicines, Caris
Life Sciences, Chroma Medicine, ConcertAI, Datavant, Immunogen,
Ironwood, and Mammoth Biosciences, among many others. Founded in
2009, Sixth Street has more than 600 team members including over
250 investment professionals operating around the world. For more
information, visit www.sixthstreet.com, or follow Sixth Street
on LinkedIn.
U.S. Important Safety Information for
SYFOVRE® (pegcetacoplan
injection)
CONTRAINDICATIONS
- SYFOVRE is
contraindicated in patients with ocular or periocular infections,
and in patients with active intraocular inflammation
WARNINGS AND PRECAUTIONS
- Endophthalmitis and
Retinal Detachments
- Intravitreal
injections, including those with SYFOVRE, may be associated with
endophthalmitis and retinal detachments. Proper aseptic injection
technique must always be used when administering SYFOVRE to
minimize the risk of endophthalmitis. Patients should be instructed
to report any symptoms suggestive of endophthalmitis or retinal
detachment without delay and should be managed appropriately.
- Retinal Vasculitis
and/or Retinal Vascular Occlusion
- Retinal vasculitis
and/or retinal vascular occlusion, typically in the presence of
intraocular inflammation, have been reported with the use of
SYFOVRE. Cases may occur with the first dose of SYFOVRE and may
result in severe vision loss. Discontinue treatment with SYFOVRE in
patients who develop these events. Patients should be instructed to
report any change in vision without delay.
- Neovascular AMD
- In clinical trials,
use of SYFOVRE was associated with increased rates of neovascular
(wet) AMD or choroidal neovascularization (12% when administered
monthly, 7% when administered every other month and 3% in the
control group) by Month 24. Patients receiving SYFOVRE should be
monitored for signs of neovascular AMD. In case anti-Vascular
Endothelial Growth Factor (anti-VEGF) is required, it should be
given separately from SYFOVRE administration.
- Intraocular
Inflammation
- In clinical trials,
use of SYFOVRE was associated with episodes of intraocular
inflammation including: vitritis, vitreal cells, iridocyclitis,
uveitis, anterior chamber cells, iritis, and anterior chamber
flare. After inflammation resolves, patients may resume treatment
with SYFOVRE.
- Increased
Intraocular Pressure
- Acute increase in
IOP may occur within minutes of any intravitreal injection,
including with SYFOVRE. Perfusion of the optic nerve head should be
monitored following the injection and managed as needed.
About ApellisApellis Pharmaceuticals, Inc. is a
global biopharmaceutical company that combines courageous science
and compassion to develop life-changing therapies for some of the
most challenging diseases patients face. We ushered in the first
new class of complement medicine in 15 years and now have two
approved medicines targeting C3. These include the first-ever
therapy for geographic atrophy, a leading cause of blindness around
the world. We believe we have only begun to unlock the potential of
targeting C3 across serious retinal, rare, and neurological
diseases. For more information, please
visit http://apellis.com or follow us
on Twitter and LinkedIn.
Apellis Forward-Looking StatementStatements
in this press release about future expectations, plans and
prospects, as well as any other statements regarding matters that
are not historical facts, may constitute “forward-looking
statements” within the meaning of The Private Securities Litigation
Reform Act of 1995. These statements include, but are not limited
to, statements regarding the anticipated benefits of the credit
facility and the use of proceeds therefrom, including the buyout of
the SFJ liability, the ability of the Company to achieve positive
cash flow, the Company’s need to access the capital markets and
whether the Company will access additional funding by entering into
a separate working capital facility. The words “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “intend,”
“may,” “plan,” “potential,” “predict,” “project,” “should,”
“target,” “will,” “would” and similar expressions are intended to
identify forward-looking statements, although not all
forward-looking statements contain these identifying words. Actual
results may differ materially from those indicated by such
forward-looking statements as a result of various important
factors, including whether the Company will be able to comply with
the obligations, covenants and conditions under its credit
facility, including its ability to repay the credit facility at
maturity; whether the Company’s clinical trials will be completed
when anticipated; whether results obtained in clinical trials will
be indicative of results that will be generated in future clinical
trials; whether pegcetacoplan will successfully advance through the
clinical trial process on a timely basis, or at all; whether the
results of the Company’s clinical trials will warrant regulatory
submissions and whether systemic pegcetacoplan will receive
approval from the FDA or equivalent foreign regulatory agencies for
C3G and IC-MPGN or any other indication when expected or at all;
the period for which the Company believes that its cash resources
will be sufficient to fund its operations; the impact of general
macroeconomic conditions, changes in interest rates and uncertain
credit and financial markets on the Company’s business and
financial position; and other factors discussed in the “Risk
Factors” section of Apellis’ Annual Report on Form 10-K with the
Securities and Exchange Commission on February 27, 2024 and the
risks described in other filings that Apellis may make with the
Securities and Exchange Commission. Any forward-looking statements
contained in this press release speak only as of the date hereof,
and Apellis specifically disclaims any obligation to update any
forward-looking statement, whether as a result of new information,
future events or otherwise.
Media Contact:Lissa
Pavlukmedia@apellis.com617.977.6764
Investor Contact:Meredith
Kayameredith.kaya@apellis.com617.599.8178
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