Apellis Pharmaceuticals - Q4 2025

Transcript

Operator (participant)

Morning, ladies and gentlemen. Thank you for standing by, and welcome to the Apellis Pharmaceuticals fourth quarter and full year 2025 earnings conference call. Please be advised that today's call is being recorded. I will now turn the call over to Eva Stroynowski, Head of Investor Relations. Please go ahead.

Eva Stroynowski (Investor Relations and Corporate Affairs Biotechnology Executive)

Good morning, and thank you for joining us to discuss Apellis's fourth quarter and full year 2025 financial results. With me on the call are Co-founder and Chief Executive Officer, Dr. Cedric Francois, Executive Vice President of Commercial, David Acheson, Chief Medical Officer, Dr. Caroline Baumal, and Chief Financial Officer, Timothy Sullivan. Before we begin, let me point out that we will be making forward-looking statements that are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional detail. Now, I'll turn the call over to Cedric.

Cedric Francois (Co-Founder, CEO, and President)

Thank you, Eva. Thank you all for joining us this morning. Before turning to our fourth quarter results, I'd like to briefly reflect on the progress Apellis 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. At our core, Apellis 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, 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. 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 OCTF, 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. 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 and delayed graft function. 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 multi-billion 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. With that, I will now turn the call over to David for an update on our commercial performance.

David Acheson (EVP of Commercial)

Thank you, Cedric. Good morning, everyone. I'll begin with Syfovre. 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 G.A. Syfovre is supported by the most extensive clinical and real-world evidence base in the category, anchored by five year GALE data. Third, advancing innovation with a best-in-class prefilled syringe and OCTF. Together, these initiatives are foundational to supporting broader growth in 2027 and beyond. Turning to Empaveli, we are very pleased with the progress in 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 injector and twice-weekly dosing. With its broad label, Empaveli is the only approved therapy for approximately 2/3 of patients with C3G and primary IC-MPGN in the U.S. As the launch has progressed, we have expanded meaningfully across 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 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 the 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. 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 U.S. C3G and primary IC-MPGN patient population. With that, I'll turn the call over to Caroline.

Caroline Baumal (CMO)

Thanks, David. I'll 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 non-subfoveal G.A. when compared to sham or projected sham. We look forward to presenting the full five-year data set 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 regulatory submission in the first half of this year.

We continue to make important progress with Functional OCT, our AI-enabled approach to visualizing functional benefit in G.A. 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. We continue to advance the phase II study of Syfovre in combination with APL-3007 as a next-generation approach 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 continued 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 therapies. Finally, I'll 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. With that, I'll now turn the call over to Timothy.

Timothy Sullivan (CFO)

Thank you, Caroline. I'll 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 4th 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. We are comfortable with the current channel levels. We therefore expect a modest inventory reduction in the 1st quarter alongside typical seasonal dynamics, including Medicare reverifications. Overall, Syfovre remains a meaningful and durable foundation for Apellis.

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 report a 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 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 of this year. We are actively evaluating a range of alternatives to address this obligation in a thoughtful and disciplined way. With that, I will now turn the call back over to Cedric.

Cedric Francois (Co-Founder, CEO, and President)

Thank you, Timothy. 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. With that, I will now turn the call over to the operator for Q and A.

Operator (participant)

As a reminder, to ask a question, you will need to press star one on your telephone. To remove yourself from the queue, you may press star one again. We ask that you please limit yourself to one question and one follow-up to allow everyone the opportunity to participate. Please stand by while we compile the Q and A roster. Our first question comes from the line of Jonathan Miller of Evercore ISI. Please go ahead, Jonathan.

Jonathan Miller (Equity Research, Biotech and Pharmaceuticals)

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

Can you talk a little bit about, you know, 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'll take to break open some of those indication subsets that are a little bit tougher to diagnose and get on treatment?

Cedric Francois (Co-Founder, CEO, and President)

Thank you so much, Jonathan, and great hearing you, and thank you everyone for joining. Empaveli is on a clear path to blockbuster status, and as you correctly outlined, Jonathan, there's not just IC-MPGN, there's also the fact that in the VALIANT study, we studied Empaveli in the pediatric population, as well as in a post-transplant setting as well. 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're not providing exact breakdowns as to where the populations things sit at the moment, it is worth noting that in the pediatric population, the 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. Contributes to our confidence of reaching up to 50% of those 5,000 patients at peak.

Jonathan Miller (Equity Research, Biotech and Pharmaceuticals)

Thanks, Cedric. I guess if you're going to see 50% penetration at peak and IC-MPGN is 50% of the U.S. population, you know, I guess I'm asking, are you going to see equivalent penetration across those different subpopulations, those different sub-indications, you know, by the end of the day? Are there places that are going to remain more difficult to penetrate?

Cedric Francois (Co-Founder, CEO, and President)

Yeah. It's, it's a little early to say that exactly, I think, at this moment in time. You know, it's also important to note that there's quite a bit of overlap between these two indications. There's no kind of a hard separation between them in the sense that, you can have a patient with a biopsy one day that, you know, is more leaning 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 the disease, of these diseases, sorry, in the clinical trials that we ran. It's a little bit too early to provide more specifics on that.

Operator (participant)

Thank you. Our next question comes from the line of Anupam Rama of JPMorgan. Your line is open, Anupam.

Anupam Rama (Biotechnology Equity Research)

Hey, guys. Thanks so much for taking the question. For Syfovre, you've got the five year GALE data this Friday that you guys highlighted. What would you have us focus in on within these data? Thanks so much.

Cedric Francois (Co-Founder, CEO, and President)

Thank you so much, Anupam. Well, the important benefits and the continued safety profile that Syfovre provides to patients with geographic atrophy, right? It is by far the largest data set ever generated in geographic atrophy. You know, 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 one and a half year of tissue. As I think you can appreciate, that's an enormous benefit to 70 or 75-year-old individual who obviously, you know, in the twilights of their lives, depends so much on their vision. We're incredibly proud and incredibly happy with the data that we have generated and look forward to presenting it on Friday. I don't know Caroline, if she would like to add something?

Caroline Baumal (CMO)

Thank you, Cedric. I think what will be meaningful for a retina physician is that we have this extended trial with five years of data that we continue 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. Thank you.

Anupam Rama (Biotechnology Equity Research)

Thanks so much.

Operator (participant)

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

Tazeen Ahmad (Managing Director of US Equity Research)

Okay, great. Thanks for taking my questions, good morning. I maybe wanted to follow up on that 50% penetration for Empaveli. How long do you think it's gonna take to reach that? I know that a big point of discussion among investors is like the ramp of your launch. Is it gonna 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? That would be helpful. Can you just talk about what the competitive dynamics are so far, relative to how doctors are viewing Empaveli versus Fabhalta? What are the types of patients that they might still be waiting to see if Empaveli might be better than relative to Fabhalta? Thank you.

Cedric Francois (Co-Founder, CEO, and President)

Thank you so much, Tazeen. Well, as it relates to the ramp, you know, I think, you correctly outlined that we should expect steady ramp and steady growth, as is quite typical in rare diseases. Again, I think, you know, we have, we have seen that happen in the past couple of months and expect that to continue to be the case. Competitively, as already outlined when Jonathan Miller asked the question, there is kind of the clear differentiation that we have and kind of the unique positioning without competition right now in the pediatric segment, as well as in IC-MPGN. That is, of course, a huge advantage. Also in the pediatric population, you know, I think the disease tends to progress more quickly.

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, of course, that is a very important place. Most majority of patients with these diseases will have a relapse because this is a genetic, condition at the end of the day.

Operator (participant)

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

Timur Ivannikov (Biotechnology Associate)

Hi, thank you. This is Timur on for Steve Seethaler. For Empaveli launch, I think you mentioned strong momentum in C3G in 2026 with quarter-over-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 (Co-Founder, CEO, and President)

Thank you so much, Timur. I will hand that question over to David Acheson.

David Acheson (EVP of Commercial)

Hey, good morning. Hope you're doing well. Thank you for the question. On the variability, it's just it's ultra-rare disease. I think it's important to note that you'll see an influx of potential patients coming in on start forms. That does vary, you know, week-over-week, month-over-month. I think it's just 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're getting on the brand, which is very positive. Can you repeat the second part of your question for me?

Timur Ivannikov (Biotechnology Associate)

Yeah, I was just wondering about the, you know, the start forms or any other type of guidance for the product.

David Acheson (EVP of Commercial)

Yeah. Moving forward, we continue to report on revenues for sure and start forms, but we're not gonna give any additional guidance on start forms that we had in the third to fourth quarter.

Timur Ivannikov (Biotechnology Associate)

Thank you.

Operator (participant)

Thank you. Our next question comes from the line of Yigal Nochomovitz of Citigroup. Hugo, your line is open.

Yigal Nochomovitz (Director and SMid Cap Biotech Analyst)

Hi. Great, thank you. Could you talk a bit about the prefilled syringe? I just want to get a sense of how much it matters for the retina docs 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 TFS? More specifically on the practice dynamics, you know, since the space is very limited for the physicians, for the fridges to store the drug, is there an advantage to the TFS in terms of practice dynamics and storing the drug with that presentation? Thank you.

Cedric Francois (Co-Founder, CEO, and President)

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

Caroline Baumal (CMO)

Thank you. The prefilled syringe is really a practice-enabling innovation, and this is going to offer convenience and efficiency to retina physicians. You know, from my experience as a clinician and also 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 really think that this is going to be transformative for physicians and their patients. When it comes to specific about the design, I think that retina physicians put their input heavily into how we design this, including the box, the complete package, and will be very, very pleased with how it fits into the refrigerators.

We also have some other things that will be helping to be transformative for Syfovre with renewed growth. That's a functional OCT, which was mentioned in the call. Thank you.

Yigal Nochomovitz (Director and SMid Cap Biotech Analyst)

Thank you.

Operator (participant)

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

Salveen Richter (Lead Analyst of US Biotechnology Sector)

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 kind of the sales trajectory as you input this into your trajectory.

Cedric Francois (Co-Founder, CEO, and President)

Thank you so much, Salveen. Timothy, can you elaborate on that?

Timothy Sullivan (CFO)

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

Operator (participant)

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

Colleen Kusy (Senior Research Analyst of Biotechnology)

Great. Good morning. Thanks for taking our questions. Congrats on all the progress. We realized for the nephrology phase three studies are just recently coming up and running now, any color you can provide on the expectations for enrollment there? you know, do any of these centers have pre-existing experience with Empaveli, and, just how that enrollment might pan out?

Cedric Francois (Co-Founder, CEO, and President)

Thank you so much, Colleen, for that question. We're very excited about these two phase III 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's a little bit early to give projections on what the enrollment will look like, but the excitement around kind of 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 in a similar efficacy profiles in these conditions.

Colleen Kusy (Senior Research Analyst of Biotechnology)

Great. Thank you.

Cedric Francois (Co-Founder, CEO, and President)

Thank you.

Operator (participant)

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

Philip Nadeau (Managing Director and Senior Biotechnology Research Analyst)

Good morning. Thanks for taking our question. We wanted to focus on Syfovre revenue trends for Q1 in 2026. Timothy, 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 Q1 of 2026 compare to Q1 of 2025? More generally for 2026, it sounds like you guys are suggesting relatively stable revenue for Syfovre. I want to make sure I understand that we should be modeling something full year 2026, similar to full year 2025. Thanks.

Timothy Sullivan (CFO)

Sure. Yeah, I think the one thing to remember, there are a couple of seasonal dynamics in the first quarter, one of which we tried to manage a little bit. As you'll recall, last year we had a fourth quarter, spike in revenue that was as a result of some inventory build across the channel. That included at the 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 reverifications in the first quarter.

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

Philip Nadeau (Managing Director and Senior Biotechnology Research Analyst)

That's helpful. Thank you.

Timothy Sullivan (CFO)

Thanks.

Operator (participant)

Thank you. Our next question comes from the line of Annabel Samimy of Stifel. Your line is open, Annabel.

Jayad Momin (Biopharma Equity Research Associate)

Hi, this is Jayad Momin on for Annabel Samimy. I just want to revisit the Syfovre 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, agnostic of the pay, the copay assistance funds coming back. Do you expect that split to be more favorable towards commercial doses going forward in 2026?

David Acheson (EVP of Commercial)

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

As you may recall, sometime in the 3rd quarter, the patient copay assistance organization was open for existing patients. That may have led to a small downtick in the total free goods in the 4th quarter, but it's really hard to say.

Jayad Momin (Biopharma Equity Research Associate)

Got it. Thank you.

David Acheson (EVP of Commercial)

Thanks.

Operator (participant)

Thank you. Our next question comes from the line of Ellie Merrill of Barclays. Please go ahead, Ellie.

Ellie Merrill (Biotechnology Equity Research Associate)

Hey, guys. Thanks so much for taking my question. Two from me. I guess, what are you looking to see in the phase two data Syfovre in combo with APL-3007 next year, and how you're thinking about what would be meaningful there? Just a clarification on the C3G, IC-MPGN comments. The 50% penetration that you mentioned, I'm sorry if I missed this, but I guess, is this the base case that you'll 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 call.

Cedric Francois (Co-Founder, CEO, and President)

Thank you, Ellie. Great hearing you. The GALE study is a study we're really excited about. What we do there is a subcutaneous injection with an siRNA product against C3, that lowers the systemic levels of C3 by approximately 90%. What that does is it translates to actually a lowering of the C3 levels in the eye as well, it 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, to increase the efficacy, which is already important, of course, from Syfovre to numbers well above that. What well above that means, we will define at a later time point.

I think again, kind of 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 population, we said we believe that up to 50% of the epidemiology, would be patients that could end up being treated with Empaveli. What I think is important in that context is, again, I think we're very good at having a conservative estimate of the epidemiology for C3G and IC-MPGN.

It is noteworthy that, you know, our only competitor in this space has an epi that is meaningfully higher, and the fact that we had more than 5% penetration in the fourth quarter, which means that we had a very, very strong launch, among the strongest launches in rare diseases, and maybe a conservative epi on our side or a combination of both. Again, we feel very good with where Empaveli is headed, with what we did in Q4 and the trend that we continue to see as this launch progresses.

Ellie Merrill (Biotechnology Equity Research Associate)

Great. Thanks so much.

Cedric Francois (Co-Founder, CEO, and President)

Thank you.

Operator (participant)

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

Lachlan Hanbury-Brown (Biotech Equity Research Analyst)

Hey, guys. Thanks for the question. I guess for Empaveli, you've previously talked about there being an initial bolus of patients, and then it sort of settles down into more of a steady state, monthly or quarterly growth in new patients. I'm wondering, sort of, where are you at 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 that you were expecting, and maybe you reach the steady state later this year?

Cedric Francois (Co-Founder, CEO, and President)

Yeah. Thank you, Lachlan. I will hand that over to David to answer.

David Acheson (EVP of Commercial)

Hey, good morning. Thanks for the question. Yeah, like we talked about last year in the Q3 launch through Q4, that bolus of patients typically hits early in the launch, and get on product, you know, shortly after the launch, and we saw that happen in the fourth quarter, so, which was great to see. Now we're at that steady state, place that we talked about in the prepared remarks and what Cedric mentioned, in the opening portion of some of the questions here. I would be confident, in the current, the continued steadiness of what we're going to see moving forward.

Lachlan Hanbury-Brown (Biotech Equity Research Analyst)

Good. Thanks.

Operator (participant)

Thank you. Our next question comes from the line of Judah Frommer of Morgan Stanley. Please go ahead, Judah.

Judah Frommer (Senior Equity Research Analyst)

Yeah. Hi, guys. Thanks for taking the question. Maybe just one on the commentary around the ability to fund yourselves through to profitability. Just curious how pipeline could impact the timing and trajectory of that, specifically maybe 9099 and 3007. What are the pushes and pulls there that could move that profitability closer or further out? Thanks.

David Acheson (EVP of Commercial)

Yeah, thank you, Judah. That's a great question. At least for the moment, we've incorporated all of that into our thinking when we talk about the fact that we may have, you know, a small increase in total operating expenses this year. As you'll see, in 2024 and 2025, it was pretty flat overall. We may have a small increase over the course of this year. You know, our, you know, with the, you know, our FSGS study and our DGF study really ramping up, and then some of these new programs that you mentioned, like the Beam program coming online towards the end of the year in terms of, you know, potential larger cost structure.

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

Operator (participant)

Thank you. Our next question comes from the line of Douglas Tsao of H.C. Wainwright. Your line is open, Douglas.

Douglas Tsao (Managing Director of Equity Research)

Hi, good morning. Thanks for taking the question. Just on Syfovre, David, just a couple of questions. I think last year you indicated there was sort of an initiative to help patients sort of end up on the right plan, which sort of improved their coverage of Syfovre. I'm just curious, sort of as you've come into the new year, if you've sort of seen meaningful progress on that. Also, I'm just curious, in terms of the free goods, are you seeing those patients sort of typically sort of get dosed with free goods, and then they see that they can't get covered or can't get patient assistance and drop off? Or are you seeing sort of a persistence of it? I'm just sort of trying to understand that in terms of understanding sort of how patients are coming in and sort of identification for the market. Thank you.

Cedric Francois (Co-Founder, CEO, and President)

Thank you, Douglas. David will answer the question on Syfovre, and I will, The first question, and I will then talk a little bit about the free goods.

David Acheson (EVP of Commercial)

Hey, Douglas, thanks for the question. On the reverification piece and just kind of 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 could help offices get educated on which plans would be specific to patients that have a gap, right? Where they couldn't get covered for a 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 playing a part of making sure education to both the patients and the offices during the reverification period of their insurance, which happens in the fourth quarter, coming into this year, helps them understand where they've got opportunities for benefit, for treatment, for benefit, and payment. All of that happened coming into this year. I can tell you the reverification process is winding down. It's 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. I'll hand it back over to Cedric.

Cedric Francois (Co-Founder, CEO, and President)

Thank you, David. Well, as it relates to the free goods, I kind of 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, you know, at the end of the day, a lot of patients being in a position where they could not afford the copay on their products, and to make sure that these patients would not go without treatment, right. That is our medical commitment to patients, and that is what we did throughout the years, last year, but we will always continue to do when it is needed. That is really important and will continue to be important for us.

I think within the context of next year as well, I think it is hard to overstate how impactful the disruption was on the workflow in the retina practices when this occurs, right? That is something that had to find a new place of settlement. That was important. During that period, there was inevitably kind of a, I would say, lowering of how many new patients would come on treatment with geographic atrophy, because within these retina practices, that is easy to essentially punt, right? That dynamic is also something that you should expect to see change over time. I think what is really important and gratifying to see right now is that within the retina world, we're 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 Tsao (Managing Director of Equity Research)

Great. Thank you, Cedric, and it's great to hear about the commitment to providing drug patients.

Cedric Francois (Co-Founder, CEO, and President)

Thank you, Doug. Great hearing you.

Operator (participant)

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

Derek Archila (Managing Director and Biotechnology Equity Research Analyst)

Hey, good morning, thanks for taking the questions. You made some comments on, you know, kind of the patient pipeline for Empaveli and C3G and IC-MPGN, I guess, what level of visibility do you have there? You know, is it as granular as, you know, understanding where the patients are at certain sites, you know, outreach to those patients? Just a second question on, you know, PFS. Just kind of curious, is it more of expand the market, or is it also share gains, you know, against the other competitor? Thanks.

Cedric Francois (Co-Founder, CEO, and President)

Thank you so much, Derek. First of all, 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 all, of course, there was the epidemiology, which, as you all know, was difficult to estimate, and feeling that we really kind of hit the bull's eye in terms of estimating that, and arguably conservatively estimating that. Of course, the very good, you know, one of the best rare disease launches that we are having in the kidney here, with that penetration within the first full quarter. 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 course, many of these patients now having transitioned to start forms and being on full treatment. That tells us that, again, we got the epi right, we continue to identify these patients, and why 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, where it has been proven over and 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. You know, of course, we expect our competitor at some point to come out with a prefilled syringe as well, right now we have a head start that, you know, we're 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 a retina practice makes it much easier for physicians to treat these patients. Makes it also much easier, quite frankly, for physicians to just try the products, right?

I mean, it is not instead of taking something, having to draw it from a vial in through a filter needle into a syringe, et cetera, you take it out of the fridge and you try it, right? Important differences, I don't know, Caroline, if you want to elaborate on that, but we're very pleased with where we are.

Caroline Baumal (CMO)

You know, this is a real innovation and this will be highly meaningful to physicians to have this way to treat their patients efficiently. I speak from my personal experience and what I've heard from colleagues, that I think that this will help to expand the market for geographic atrophy.

Cedric Francois (Co-Founder, CEO, and President)

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

Philip Nadeau (Managing Director and Senior Biotechnology Research Analyst)

Great. Thanks very much.

Operator (participant)

Thank you. Our next question comes from the line of Rygver Deshler of Raymond James. Please go ahead, Ryan.

Speaker 21

Hi, good morning. This is Anthony on for Ryan. We wanted to ask, can you walk us through how retina specialists can potentially use OCTF in their practices? How this could increase the size of the GA market? If you have, like, an approximate timeline for when you anticipate having appreciable amounts of real-world OCTF data for analysis. If possible, I have a follow-up.

Cedric Francois (Co-Founder, CEO, and President)

Thank you so much, Anthony. Well, we're touching on Caroline's favorite subject here. For those on the call not familiar with OCTF is functional OCT, and it is a technology that we developed in collaboration with University of Bonn in Germany, where we used our, what is the largest dataset of microperimetry data ever generated in the retina, where we used that technology to essentially take an OCT and translate an OCT image into what a real functional mapping of the retina is. In other words, what is the retinal sensitivity 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 pan-retinal neurodegenerative condition, and we can now image that. Commensurate with that, of course, 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, again, as I mentioned, raising the awareness around how impactful geographic atrophy is on patients. It becomes our mission to make this available in the retina practice, so that a physician, in a one-on-one interaction with a patient, can actually do that analysis. Assess the patient, again, 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. Maybe you want to add a couple of words.

Caroline Baumal (CMO)

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

Speaker 21

All right, thank you very much. Thank you for the in-depth explanation. Sorry.

Operator (participant)

Thank you. Our next question comes from the line of Doug Kim of Mizuho. Please go ahead, Doug.

Doug Kim (Analyst)

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

Cedric Francois (Co-Founder, CEO, and President)

Thank you, Doug. Good hearing from you. As a class, we believe that, you know, it's hard to believe that it's still the early days of what can be done for patients with geographic atrophy. Of course, with the differentiation of our products, and the enormous amount of data that we've generated, including over, as you mentioned, 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 (EVP of Commercial)

Yeah, thanks for the question. You're correct, we're holding steady at 60% market share, which we're confident in, and we feel really good about where we're coming into 2026. I can tell you that we're really confident in the competitive strength that we have, including the GALE data that we just talked about and came out this week. I think it's important for us to note that nobody else has that data, and it's a big strength for us to have that kind of data with the patients that are in the long-term study. And our focus, quite frankly, is really being disciplined on execution and to continue to innovate with what we're doing with the brand and to continue that leadership reinforcement moving forward with within the space.

You know, the market share is part of that, but certainly driving innovation is a part that will continue to drive uptake, market growth, and our shared growth as well.

Operator (participant)

Thank you. I would now like to turn the conference back to Cedric Francois for closing remarks. Sir?

Cedric Francois (Co-Founder, CEO, and President)

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're 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 (participant)

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