BofA Securities has revised its price target for Apellis Pharmaceuticals (NASDAQ: NASDAQ:APLS), reducing it to $61.00 from the previous $66.00, while still maintaining a Buy rating on the stock.
The adjustment follows a survey conducted by BofA Securities, which gathered insights from 34 experts who treat over 16,000 patients with geographic atrophy (GA).
These experts reported that currently, 18% of GA patients receive treatment, with a nearly even split in the usage of Apellis's Syfovre and its competitor Izervay, at 49% and 51% respectively.
The surveyed experts anticipate that at peak, 33% of GA patients will be on treatment, with a projected market share split of 46% for Syfovre and 54% for Izervay.
Despite the growing competitive landscape, especially after Izervay received a permanent J-code, physicians expect to increase the use of Syfovre over the next 24 months. The survey suggests that Syfovre could reach a 15% peak penetration in the overall market.
According to the survey, complement inhibitors, which include Syfovre, are on track to nearly reach $1 billion in sales this year. However, there are questions surrounding the actual size of the GA market.
BofA Securities has adjusted its peak sales estimate for Syfovre to $2.5 billion, down from the previous $3 billion forecast, assuming an equal market split in what may be a smaller commercial market than initially anticipated.
The revised projection has reduced Syfovre's contribution to Apellis's share value to $58, down from $63, leading to the new price target of $61.
The final opinion from the Committee for Human Medicinal Products (CHMP) in the European Union, which is expected during the week of September 16, 2024, is eagerly awaited by BofA Securities.
Apellis Pharmaceuticals has been making headlines with positive results from its Phase 3 VALIANT trial for the drug pegcetacoplan. The study demonstrated a significant 68% reduction in proteinuria, a marker of kidney damage, in patients with two rare kidney diseases, C3 glomerulopathy (C3G) and primary immune complex membranoproliferative glomerulonephritis (IC-MPGN).
On the financial front, Apellis reported robust growth in Q2 2024, with its drugs SYFOVRE and EMPAVELI performing well. SYFOVRE achieved over $0.5 billion in sales since its launch and $155 million in net product revenue in Q2 2024 alone. EMPAVELI also generated substantial revenue with $24.5 million in sales.
InvestingPro Insights
As BofA Securities adjusts its price target for Apellis Pharmaceuticals, investors can consider the latest metrics and expert analysis from InvestingPro to gain a deeper understanding of the company's financial health and market position. Apellis's market capitalization stands at approximately $5 billion, reflecting investor valuation of the company. Despite challenges in profitability, with the company not expected to be profitable this year and a negative P/E ratio of -15.11, there are positive aspects to consider. Notably, Apellis has demonstrated impressive revenue growth, with a 240.74% increase over the last twelve months as of Q2 2024, and a gross profit margin of 36.87% in the same period.
InvestingPro Tips highlight that while analysts have revised earnings downwards for the upcoming period, they anticipate sales growth in the current year. This aligns with the strong revenue growth figures and may indicate potential for future financial improvement. Furthermore, Apellis operates with a moderate level of debt and its liquid assets exceed short-term obligations, suggesting a stable financial position in terms of liquidity and debt management. It's also worth noting that Apellis is trading at a high Price/Book multiple of 18.91, which could suggest that the market has high expectations for the company's growth or that its assets are being valued significantly by investors.
For those looking for more detailed analysis, there are additional InvestingPro Tips available on the platform, providing a comprehensive look at Apellis Pharmaceuticals' financials and market prospects. This can be particularly valuable for investors considering the company's potential in light of the competitive pressures and sales projections discussed in the article.
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