Apellis Pharmaceuticals, Inc. Q2 FY2022 Earnings Call

Ladies and gentlemen, thank you for standing by and welcome to the Apellis Pharmaceuticals Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. I'd now like to turn the call over to your host Meredith Kaya. You may begin.

Good afternoon, and thank you for joining us to discuss Apellis's second quarter 2022 financial results. With me on the call are Co-Founder and Chief Executive Officer, Dr. Cedric Francois; Chief Commercial Officer, Adam Townsend; Chief Medical Officer, Dr. Federico Grossi; and Chief Financial Officer, Tim Sullivan. Before we begin, I would like to point out on Slide 3, 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 our 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.

Thank you all for joining us today. 2022 is a transformational year at Apellis and we are making great progress across each of our key priorities. I'll start with geographic atrophy, or GA. A few weeks ago, we were thrilled to announce that our NDA for intravitreal pegcetacoplan was accepted by the FDA with a priority reviews designation and the PDUFA date of November 26, 2022. The FDA also stated that it is not planning to hold an advisory committee meeting to discuss the application. This is the best outcome we could have hoped for and I am so proud of the Apellis team for their efforts in getting us to this pivotal point. The NDA includes all available data from our DERBY and OAKS studies out to 18 months and in the case of some patients even longer, as well as the 12-month data from the FILLY study. Collectively, these data reinforced the potential for pegcetacoplan to meaningfully slow disease progression and become the first-ever treatment for the millions of patients living with GA, a relentless disease that is a leading cause of blindness worldwide. We continue to work with the agency in our efforts to bring this therapy to patients who currently have no approved treatments. In parallel, we are also ramping up our commercial preparations so that we are well positioned to bring intravitreal pegcetacoplan to patients immediately upon potential approval. In Europe, we are on track to submit our application to the EMEA by the end of this year. We will include the 24-month data from DERBY and OAKS in our submission, which we plan to report in September. I will speak to this a bit more in a few minutes. Turning to PNH, we remain focused on further establishing EMPAVELI as a first-line treatment for patients living with PNH. We are seeing continued strength across a number of key indicators translating to $15.7 million in US net revenues for the second quarter. Globally, our partner Sobi is also making progress in bringing EMPAVELI to patients with PNH outside of the US. Beyond PNH, we continue to advance EMPAVELI as a transformative therapy for rare complement driven diseases. Together with Sobi, we now have four later stage clinical programs underway. We are also continuing to progress our early-stage pipeline with INDs planned for APL 2006, and our SiRNA program in the first half of next year. We have made great progress in our partnership with Beam and with our efforts to advance complement inhibition as a novel approach to enhancing adeno-associated viruses or AAV-based gene therapy products. We are also continuing to advance our preclinical work with APL 1030 for potential use in neurodegenerative diseases, but no longer expect to submit the IND by the end of 2022. On the finance side, we ended the second quarter with approximately $850 million in cash providing runway into the first quarter of 2024. This puts us in a uniquely strong position in this challenging market environment as we head into a potential launch later this year. We look forward to building on our momentum as we further cement our position as a leader in complement across multiple therapeutic areas. And with that, I will turn it over to Adam.

Thank you, Cedric. Turning to Slide 5, we are now in our second year of commercial EMPAVELI in the US and as Cedric mentioned, the commercial launch remains strong. In the first year, we focused our efforts on the patients with the highest unmet need who are the one third of patients on C5 inhibitors who require transfusions to address their falling hemoglobin levels. We are continuing to see positive trends across the key leading indicators. In the second quarter, approximately 30 start forms were generated bringing the total number of start forms since launch to approximately 190. Over 75% of C5 inhibitor patient switches are continuing to come from Ultomiris. Over 35 additional physicians were REN certified bringing the total since launch to greater than 200. We continue to see strong REN certification growth, which continues to be a key leading indicator as we move into the second year of launch. Patient compliance rates remain high at 95%, and we have established strong formulary access among the top 20 payers. Now in the second year, we are heading into the next phase of our commercial strategy, which is expanding our focus to the broader PNH community by further positioning EMPAVELI as first-line treatment for all patients with PNH. We are refining our physician targeting so that we efficiently call on those prescribers who are treating the majority of PNH patients. We are also advancing our outreach to key thought leaders, especially now that Dr. Hillman is fully onboarded. In this next phase of launch, we will evolve our partnerships with new centers to drive additional prescribers and ensure that patients with PNH have access to EMPAVELI. Additionally, our S&DA including the Phase 3 print results and the 48-week Phase 3 Pegasus data was accepted with a PFDUFA for date in February 2023. If approved by the FDA, this will allow us to strengthen our promotion of EMPAVELI for treatment-naive patients, and raise more awareness of our long-term efficacy and safety data. Now turning our attention to our progress in GA on Slide 6, we are excited to be even closer to our anticipated approval and commercial launch in this critical area of high unmet need. GA impacts five million people worldwide, including one million people in the US and I expect the first approved therapy for this devastating disease may uncover even more patients. Here at Apellis, we are compelled by the potential to bring the first-ever treatment to patients as quickly as possible and excited by the FDA's decision to grant intravitreal pegcetacoplan, a priority review designation. We are eagerly awaiting our November PDUFA date and our team is focused on ensuring that we are well positioned for the launch. We are ramping up our commercial capabilities with the key US leadership positions already in place, as well as additional key positions globally and much of the US field force is starting imminently. Our focus prior to approval is on disease state awareness, specifically within the retinal community and among some of the broader eye care groups. We are also advancing payer engagement to help us to secure strong reimbursement and access post-approval. And we have established a Retina Advisory Council made up of several global opinion leaders to provide insights and advice as we prepare to bring pegcetacoplan to the market. At launch, our initial focus will be on the top 2,600 retinal specialists and injecting ophthalmologists in the US. These physicians are managing the vast majority of GA patients currently. We will expand our efforts over time to activate additional referral pathways to ensure that GA patients are being referred to the right physician for treatment consideration. We look forward to providing more granular details on launch preparation and execution as we closer to our PDUFA date.

Thank you, Adam. The data from our DERBY and OAKS studies continue to underscore the significant potential of our C3 complement approach. Following the 18-month data reported in March, we have shared additional analysis at key retina meetings, reinforcing that treatment with both monthly and every other month intravitreal pegcetacoplan induced studies demonstrated a clinically meaningful reduction in GA lesion growth with a favorable safety profile. As highlighted on Slide 7 at ARVO in May, we presented data showing that treatment with pegcetacoplan continues to demonstrate a robust effect in patients with extrafoveal lesions and an improved effect in patients with foveal lesions as compared to what we observed in the 12-month results. We also had a strong presence at the Macular Society in June. This included data showing consistent reductions in GA lesion growth in treated eyes versus untreated fellow eyes. Pegcetacoplan also demonstrated sustained reductions in GA lesion growth across all subgroups defined by increasing distances from the center. And just last month at the ASRS, we shared analysis from DERBY and OAKS that showed the mean rate or slope of GA lesion growth at 18 months. The results from this analysis were consistent with what we have shown previously at 18 months with all nominal P values for both dosing regimens below 0.05. Collectively, all the data from DERBY, OAKS and FILLY reinforce the potential of pegcetacoplan to slow the progression of GA across the disease spectrum, which is critically important given the heterogeneity of this patient population. We're excited to potentially bring the first-ever therapy to patients with GA with an opportunity to save as many photoreceptor cells as possible throughout the course of the disease. In September, we plan to share top-line results at 24 months. As you may recall, at 18 months, we presented pool data showing that treatment with pegcetacoplan resulted in increased efficacy over each six-month interval: zero to six, six to 12, and 12 to 18. We look forward to evaluating whether this improvement continues between month 18 to 24. If confirmed, it could mean that the longer patients are on treatment, the better the response to the drug. This could compound into very large lesion size reduction over time. Additionally, the secondary functional endpoints will be assessed at 24 months. GA progression is correlated with the loss of visual function over long periods of time, meaning that reducing the rate of GA lesion growth should eventually reduce the rate of vision loss. As we have mentioned before, and as literature will suggest, we do not expect to detect the difference between pegcetacoplan and Sham at 24 months due to the limitations of the functional endpoints and a relatively short period of time over which they are being assessed. We anticipate the separation to occur over longer periods of time. We will include this 24-month data in our MAA. We have had productive discussions with the EMA to date and are on track to submit into EMA by the end of 2022. The EMA has shared with us that they want to understand the relationship between preserving visual function and reductions in GA lesion growth. We're confident in our ability to show this based on published natural history studies and data from our Phase 3 study. Moving on our pipeline on Slide 8, we're also working to deliver on the broad platform potential of EMPAVELI to advance our rare disease franchises, which includes four later stage studies in multiple complement-driven diseases. In May, we launched the first Phase 3 study with pegcetacoplan in immune complex membranoproliferative glomerulonephritis or IC-MPGN and C3 glomerulopathy or C3G. We also learned that the FDA granted orphan drug designation for pegcetacoplan for the treatment of IC-MPGN. This designation had previously been granted for pegcetacoplan for C3G. The Phase 2 study in hematopoietic stem cell transplant-associated thrombotic microangiopathy or HSCT-TMA is actively enrolling patients. Our partner Sobi is currently screening patients for the Phase 3 study on cold agglutinin disease or CAD, and has guided to dosing the first patient in the second half of 2022. And finally, we remain on track to report the top-line results from our potential registrational Phase 2 study in ALS in mid-2023. Let me now turn the call over to Tim for a review of the financials. Tim?

Thank you, Fede. Since we issued a press release earlier today with the full financial results, I will just focus on the highlights for the second quarter of 2022, summarized here on Slide 9. Total revenue was $16.3 million, which consisted of $15.7 million in EMPAVELI net product revenue and $0.6 million in collaboration revenue from Sobi. R&D expenses were $102 million, G&A expenses were $63 million and we reported a net loss of $156 million. As of June 30, 2022, Apellis had $853 million in cash, cash equivalents, and short-term marketable security. We expect our current cash balance to fund our operations into the first quarter of 2024, including the ongoing EMPAVELI launch, the global launch of pegcetacoplan in GA, and further development of our pipeline. We remain confident in Apellis's financial future as we continue to execute on our upcoming milestones. I will now turn the call back over to Cedric for closing remarks. Cedric?

Thank you, Tim. We are excited about the many opportunities ahead. By year end, we will expect to advance our position as the global leader in complement with two commercial products and a robust pipeline encompassing multiple late-stage rare disease programs and additionally preclinical programs heading into the clinic. We look forward to continuing to share our progress as we build on the company's momentum. Let us now open the call for questions.

Our first question comes from Madhu Kumar from Goldman Sachs. Your line is open.

Hey everyone. Thanks for taking our questions. So I guess two from us. The first one is a question we've been getting a lot recently from investors is how to think about some of the disclosures of pegcetacoplan neuropathy events that were mentioned in the ARVO presentation a few months ago. So how are you guys thinking about ION and how are you thinking about it in terms of kind of the ongoing review process for PEG and GA? Second question is getting a lot from investors is how to think about the recently passed drug pricing reform as part of the inflation reduction that happened over the weekend? How do you think that impacts the drug like pegcetacoplan that is largely biased towards patients on Medicare and kind of elderly patients and has kind of like a big market opportunity framework? So any visibility on those two points would be greatly appreciated.

Thank you so much, Madhu, and it's great to hear you. So first of all, on the ION cases, no assays for ischemic optic neuropathy were reported between the 18- and 24-month standpoint. So as you may recall, between the two studies, we had one case between month 6 and 12 and two cases between months 12 and 18, where again, the patients that were subjected to this also had comorbidities that could explain why this happened. But it's something that we continue to track, and we were very happy to see that it does not occur again, and it's not something that we are concerned about at this point, in fact. I'm going to hand it over to Adam to talk briefly about further pricing.

Thanks for the question, Madhu. So obviously, we're monitoring this quite closely, but we believe the direct impact on the Apellis portfolio is currently pretty limited. And let me explain a little bit our thinking. So let's start with EMPAVELI, right? So EMPAVELI don't think can be subject to negotiation until 2030 at the earliest. And even then, we think it's probably unlikely that Medicare spending on the drug would be sufficient to result in CMS seeking to negotiate a price for the drug. As a reminder, right of our current sales, Medicare only represents 25% of the current business. Now obviously, with future indications and the extent of the Medicare spend, we will determine the likelihood of eligibility for inclusion or negotiation in the future. Now if we move to GA and intravitreal PEG, based on the most recent bill language, again, the drug would not be subject to negotiation until early 2030s at the earliest. Obviously, at the moment, we can't determine the likelihood of negotiation until later in the 2020s when we have some more data on the spending on PEG MGA and how that compares to other Medicare products. What is interesting is, obviously, currently our composition of matter patents for PEG expire in the early 2030s. So even with a negotiated price potential, it would only really have an impact for two to three years until our IP hits. So as I said at the beginning, I think at the moment, as we can see the bill, we believe the direct impact on Apellis and our portfolio is currently limited.

The next question comes from Umer Raffat with Evercore. Your line is open.

Maybe a couple of them, if I may? First, could you clarify, and I know there's been a lot of confusion on this, could you clarify any cases of metritis, uveitis or ION in the Phase II FILLY trial that may not have been in the presentation? And I think there's one case in Sham, for example, if you could speak to that. And then secondly, folks listening in. I know there's been a lot of interest in understanding the profile on the clouding side for view from their Phase III experience. If you could speak to any observations along those lines from your data to date? And I'm specifically referring to the conclusion seen in view and if there's anything like that. Thank you very much.

Yes. Thank you so much for that question. So in FILLY, we had a case of ION in the sham control and in the untreated fellow as well. And that's, as I already mentioned, previous question. ION is something that does occur naturally in the elderly population, and it appears to be something that occurs more commonly when patients received intravitreal injection, something that we know also from the patients that are on treatment with anti-digestants. Also, the cases of uveitis go hand in hand with the intraocular inflammation background that we have for this intravitreal administration of pegcetacoplan. And the IOI cases that we have, first of all, on a qualitative basis are different from what we see with Dove where really the types of IOI that we had or that you have with that therapy can be very destructive to the eye. The profile that we have seen for the cases of inflammation are, first of all, quantitatively very low and in line with what you would expect from patients on intravitreal treatment. We also believe that the safety profile continues to be very favorable and look forward to reporting the 24-month assessment as well.

And Cedric, would you guys be able to speak to vision loss with any of these cases when the 24-month data comes out? I don't want to put you on the spot right now.

Well, look, we will, of course, elaborate more on the safety profile, including on what exactly the impact of these cases are. When exactly we will do that remains to, I'm not sure the top line unless it's considered meaningful. But definitely, in the future, we'll talk more about that.

Our next question comes from Anupam Rama with JPMorgan. Your line is open.

Congrats on all the progress, particularly on the GA side. I wanted to ask a question on the 24 DERBY and OAKS coming on back of some of your opening comments. So in a note last week, we have that sort of pegcetacoplan preservation of relative to base and/or a couple of letters relative to placebo as kind of a win scenario. Where will track on the pegcetacoplan. Thanks so much?

Thank you for your question. We are looking forward to the 24-month data in September, as mentioned. Regarding the functional endpoints, as we have consistently stated, we believe that these endpoints are not relevant to the FDA. The reason is that measuring functional endpoints is quite challenging due to their variability. It takes a long time to see results from a baseline or to observe differences over treatment duration. Ultimately, it is about assessing the relationship between reduced lesion growth and the preservation of photoreceptor cells, and estimating how this will affect the functional endpoint in the long run. We will be focusing on this. We anticipate that the results at 24 months may not show a significant difference, at least not statistically, and we believe this will not impact the FDA approval process.

Our next question comes from Tazeen Ahmad with Bank of America. Your line is open.

As it relates to dosing frequency, is every other month still something that's realistically on the table as far as your discussions with the agency? And do you think that physicians having the flexibility to dose either once a month or once every other month is going to be important for commercial uptake? And then secondly, can you just give us an update on where you are with ramping on the commercial front in terms of hiring people and when they would be trained, and would you be ready to go on day one if you got approval in November?

Thank you so much, Tazeen. So not only is every other month on the table, it's a product profile that we are very excited about, right? So when you look at the efficacy profile that we reported in 18 months, we'll see what happens at 24. You get a lot of the benefits, maybe as much as 90% of the benefits with every other month injections versus monthly treatment with half the number of injections, right? So something that is very exciting to us, something that we will continue to evaluate. To get to your point on the competitive profile we have several elements that position us favorably competitively as well. First one, of course, again, the ability to dose every 2 months. Secondly, the fact that we have reported all of the data to the FDA all the way up to 18 months with, I think, a reasonable expectation that should we get approval that, that will be included into the label. We also have, of course, both FILLY as well as extra foveal patients that were included for a broad patient population, all of which we look forward to talking about more I'm going to hand it over to Adam to briefly discuss what we are doing in terms of commercial readiness.

Tazeen, it's Adam. So thanks for your question. So yes, we are ready to go. We started to look for all of our field-based teams prior over the last couple of months, and we're now in the process of onboarding all of them. So a quick step back prior to this great news, we had hired the high-level leadership roles within the U.S., the high-level leadership roles within Europe and rest of world. And now we're going through all of the training process over the next couple of weeks to fully onboard the field-based teams from a medical affairs perspective and a market access perspective as well as any more sales and marketing people. We had a huge amount of interest in people wanting to join our company, which is super exciting. And obviously, we are getting ready for our November PDUFA date. And the second part of your commercial ramping question was, are we going to be ready at that time? And the answer is absolutely, that's our plan. I mean, with high unmet need in GA. We're going to do everything that we can to be ready immediately post that PDUFA date. So the team is exactly where they need to be today.

Next question comes from Lyla Youssef with Cowen. Your line is open.

Congrats on the progress. Maybe quickly on the European filing expected by the end of the year in GA, can you just quickly clarify what else is outstanding besides the 24-month data for that? Is any component of that may be dependent on feedback from the FDA? And then maybe as a quick question. Appreciate that the FDA didn't request an AdCom currently, but what is your kind of understanding of the last possible deadline that they would have essentially change their mind and reflect the AdCom given the timing of your current PDUFA?

Thank you so much, Lyla. It was a bit surprising, but I believe you asked about the European submission, including the 24-month data, which we plan to include and file before the end of the year. I'm not sure if you had a more specific question regarding that.

Yes, if there is anything else that was outstanding or if you're waiting on feedback from the FDA that could help change that timing?

No. So this is not linked to feedback from the FDA. It's just including the 24-month data. And then as it relates to the no AdCom. So I believe from my understanding that up to 6 weeks before the PDUFA date, you can't have an AdCom. I think that considering the various timelines that we have that, of course, the longer time goes by, the less favorable time comes to still organize an AdCom so far, we have not received any indication that there would be one. I think it's also worth mentioning that the feedback that we gave as it relates to the regulatory communication was done in writing and is to the best of our knowledge.

Our next question comes from Steven Seedhouse with Raymond James.

Just from a statistical analysis plan standpoint, when the FDA reviews the GA submission, is the primary analysis 12 months in all three studies or 18 months in DERBY and OAKS? And just given the availability of the 18-month data in the filing, are you still sort of needing to specify that FILLY and OAKS are the two positive well-controlled studies? Or do all three studies fit that criteria now?

Yes. Thank you so much, Steve. So the FDA does consider the primary analysis endpoint at 18 months in DERBY and in OAKS. In FILLY, of course, the treatment was up to 12 months. So there, it was at 12 months. You correctly point out that it was very important to us to get adjudication on FILLY in November last year. It would give us confidence and also allowed us to prepare the readout without spending a lot of time trying to understand therapy and with the confidence that over time, DERBY would catch up to the OAKS trial. And that is what we saw happening at the 18-month data standpoint where, of course, the p-values flipped, and we will continue to see what happens at the 24 months, whether that correction continues to take place.

Our next question comes from Christopher Howerton with Jefferies.

This is Combie for Chris. Maybe on kind of the EMPAVELI label expansion opportunity, can you help us understand the mechanistic differences between IC and PGN and C3G? What proportion of these post-transplant patients have recurrent disease? And do you expect EMPAVELI will perform as well in more severe patients as opposed to kind of more moderate patients? And then maybe as a second indication for ALS, can you help us understand the cast score endpoint? And what will be important to demonstrate in terms of survival time in terms of the ALS function rating score?

Thank you, Combie. So on the C3G indication, we kind of think about the C3G and for that matter, the IC-MPGN population in kind of three buckets. The first one is newly diagnosed patients typically adolescent still with well-functioning kidneys but with, of course, a path towards kidney failure. The progression of the disease typically means that over the course of 10 years, half of your patients will go into end-stage renal disease. So that's, of course, when you're in your teens, not a lot of time. The second bucket of patients, therefore, are those that are having significant loss of renal function, sometimes with nephrotic syndrome. And those are patients where efficacy becomes crucially important to avoid, of course, dialysis or let alone transplantation. And then to your point, the third category of patients are those that have been transplanted and where recurrence again is something that occurs in more than half of the patients and something where we believe we can have an influence in avoiding that from happening. Then as it relates to ALS, the primary endpoint that we have there is the combined assessment of function and survival. This is an endpoint that was discussed, not just with the U.S. regulators, but also internationally. The study is a registrational Phase II clinical trial. So it is properly powered for a positive readout to hopefully allow us to file in the various jurisdictions.

Great. And then just one quick follow-up. Is there any lessons you can learn from kind of the systemic administration of ability for ALS that you may be able to apply to your intrathecal neuro programs or nothing there? That's my final question.

Yes. So I think, look, as many of you know, anti-C5 has failed before when Ultomiris was tested in patients with ALS, but we also all know that C3, there's many things that C5 control does not do. We showed that very clearly, of course, in PNH, and it was the source of our approval there with EMPAVELI. We are now well north of 600 patient years of dosing with EMPAVELI. And I think it's a point that we will be talking about more as we haven't seen a single case so far of meningococcal infection, not one. Whereas at this point in time, should have been on a C5 inhibitor, it's probably reasonable to have expected in the range of three cases, if not more. So that is something that we're very excited about. I think it's a safety profile that is building as we get more patients on active treatment, and something that should we have a positive result in ALS for the other indications where we're testing will, of course, be very beneficial as well.

Our next question comes from Colleen Kusy with RW Baird.

As a follow-up to Steve's question earlier on the 18-month data, is there any feedback you've received from the FDA? How do you see the 18-month data fitting into the filing, I guess, specially as it relates to the 12-month data?

Thank you, Colleen, for that question. It was very important for us to include the 18-month data. When we received the readout in September, we were disappointed to narrowly miss the primary endpoint in therapy. We took two significant strategic steps. The first was obtaining the adjudication in FILLY in early November. The second was our decision in January to approach the FDA in our pre-NDA meeting to propose including the full analysis for safety and efficacy up to 18 months, hoping to catch up on their B2 books. As you know, that indeed happened. The data up to 18 months was submitted, and the interpretation of the primary endpoint was significant with that 18-month data in mind. I believe this creates a very complete picture for the FDA, and it was a good decision to proceed in this way.

Yes. Great. And are there any avenues that you're aware of that the FDA has available to get feedback from industry experts outside of a formal AdCom? Or if there's no AdCom, how should we assume there's kind of no interaction between the FDA and the field during its review?

Yes. So look, I think with the ophthalmological division at the FDA, we have a very well-informed and well-run division that has been stable for a very long time, right? The leadership there has been there for, I believe it's now three decades. And I know for a fact that this is a division that has a very deep interaction with the key opinion leaders in this field. So the reason why there was no ad com, I'm not going to speculate on. We believe that the filing was straightforward based on the content that we submitted, and it seems that they agree with us. But we also know for a fact that there are lots of interactions that happen offline in this very tight-knit community.

Our next question comes from Derek Archila with Wells Fargo. Your line is open.

I have two questions. First, has the FDA discussed with you any potential findings regarding safety or efficacy from the 24-month data set that might lead to an advisory committee meeting or require the 24-month data to be included in the review? Secondly, regarding PNH, how are you tracking the launch plan? What are the major benefits of including the 48 weeks in the PRINCE data, and what issue is that addressing in the launch?

Yes. Thank you, Derek. I will hand over the PNH question to Adam. But as it relates to the 24-month data, I think it's important to note that we don't expect any surprises between 18 and 24 months, right? So we believe to see an extension of both the efficacy as well as the safety profile as it was established at 18 months. So I think that is the way the FDA looked at it. That's the way we look at it. Of course, should something unexpected emerge at that point in time, it's hard to know what action should be required or what we would do, but that's not something that we believe will be the case. And then for PNH, I will hand it over to Adam.

Thanks, Derek. Yes. So obviously, we're entering year 2 of our launch. And internally, we've now pivoted to what we call Phase II strategy, right, where we're starting to target new centers and new physicians and continue to drive those sources of demand, and we'll keep talking about start forms and switches from C5 and REMS certifications, et cetera. The 48-week and PRINCE state just really solidifies our first-line treatment of choice for PNH, right? The more data that we can have in the label, the more robust conversations we can have with physicians on the long-term efficacy and safety, but also on treatment-naive. We're making really good inroads with treatment-naive patients. And I'll give you a little insight, our July start forms over 1/3 of our July start forms were treatment-naive patients. We continue to see growth as physicians start to broaden their use from those with the highest unmet need to those larger and broader PNH patients than treatment-naive patients. So I expect to see that continue to progress and accelerate as we enter the next phase of our launch. So that's how the PRINCE data and the 48-week PEGASUS data help us out.

Our next question comes from Justin Kim with Oppenheimer. Your line is open.

Just maybe one question from us. I know that the 24-month data may not be sort of that point where you can see separation on visual acuity. But how should we think about GALE and sort of that sort of duration of treatment as you combine it with potentially DERBY and OAKS? Is that something that could show maybe that hint of a trend or separation? Just wondering how we should think about that study.

Yes. Thank you very much for that question, Justin. So GALE is something that we are incredibly excited and happy with. So for those not familiar with that, it's a 3-year extension on the patients from DERBY and OAKS that we then enroll to continue to monitor how function and how lesion-size reductions and safety profiles themselves over time. It's also something that's very important to us competitively. So again, we have every other month dosing. We have our first mover advantage. We have 18-month data, and the filing includes all types of patients with foveal as well as extrafoveal patients. And then again, the ability to look and see as to what happens in the long run. So it's something very important to us that we will talk about in years to come.

Our next question comes from Yigal Nochomovitz with Citi.

I think, Federico, you said that the EMA wanted to see the relation between preserving visual function and lesion growth. So could you just expand a little bit on what data specifically you're going to leverage to make this point to since you said that the 24-month update won't be sufficient to show the separation on the functional endpoints?

Thank you for the question. When we mention that the 24 months may not be significant, we mean that it might not be enough to reveal trends in the data. We will examine what we obtain from the study, alongside all the natural history data, to explore the relationship between the functional endpoints and the anatomical endpoints. Function may not necessarily stem from central visual acuity, which is difficult to measure. Therefore, we will conduct further analysis of the data in the study to identify any correlations.

Okay. And then just, Adam, could you just tell us, if you could, what percent of the PNH market you believe you've captured so far in the U.S?

Yes, thank you, Yigal. We believe there are 1,500 C5-treated patients, and we have about 190 to 200 stockholders. This reflects the progress we are making. While we don't provide revenue guidance, with over 200 certified physicians and the continued submission of stock forms, we feel we are making significant strides in converting C5 patients and beginning to engage naive patients within PNH.

Our next question comes from Ellie Merle with UBS.

Just first on the ION. Can you just elaborate on the cases that we're seeing, I guess, how the patients presented and how they were managed and I guess, if it was resolved? And then also specifically, I think in one of the first questions on the call, you mentioned some comorbidities that the patients had. If you could just kind of elaborate on this and maybe why this sort of leads you to think that this was not drug related in those cases team? And then just second question, just in terms of thinking about the real-world potential duration of use of FI-VEGF in the cases of sort of new onset expedition, maybe just how you're thinking about that? And how long anti-VEGF might be used in those cases? And I guess, if there's any data that we can expect such as from the 24-month data or I'm thinking about sort of the longer-term GALE study about sort of the management of the new onset expeditions thinking about the duration of use of the anti-VEGF.

Thank you, Ellie. So on the ION cases, the details is not something we're going to talk about on this call. I think the first and important point was to find out that these SAEs were becoming worse over time, right? We had one from six to 12 and then two from 12 to 18. There was, of course, I think your rightful consideration. This is going to be converse or not, and it isn't, right? So we didn't have a single additional case. Now as it relates to the to the real-world covenants for the new vaccinations, the DERBY and OAKS studies, when patients have nuanced exudations, they get treated with anti-VEGF on regular pathology. At the end of the two-year time period, we have on PRN step. What does that mean? People stop receiving anti-VEGF and then we find out how long does it take for these patients to leak again. And we compare that between active and the sham control. So that's going to be an interesting piece of information on which we will have more information next year as well. So GALE is important there again to find out what that means, how the independent patients are going to be on anti-VEGF. But I can tell you that in the studies, the combined administration of anti-VEGF and pegcetacoplan has not been an issue.

Our next question comes from Annabel Samimy with Stifel.

So I realize I'm possibly getting the cart before the call. But you studied GA in a range of disease severities. So how do you envision approaching this market now it's clear from the data that the earlier, the better, but clearly the most desperate are the patients that were simply in site and maybe getting release benefit? So how are you initially going to be targeting this market as you enter the market?

I had difficulty hearing you for a moment. To clarify, Tim was able to hear better than I could. One of the most exciting aspects of our data is that administering injections every other month appears to provide close to 90% of the benefit in slowing the progression of geographic atrophy. This aligns well with the product profile. While there are various product profiles, two particularly stand out. One is for patients who have lost vision in one eye and wish to preserve as much vision as possible in the other eye, which may warrant aggressive treatment, potentially with monthly dosing. The second profile involves newly diagnosed patients with an extrafoveal lesion in their first eye, where the fovea is unaffected. In this case, making a long-term investment with every two months dosing is essential. At the 18-month mark, we observed that with every six-month segment, the reduction in lesion growth improved, not in a linear fashion, but the drug’s efficacy seems to enhance over time. Although this is not a requirement for approval, it’s exciting to consider treatments over two, five, or ten years, especially for early lesions. We’ll monitor what occurs between months 18 and 24, and if the trend from the first three segments continues, it holds great promise. Those early, extrafoveal lesions in newly diagnosed patients and investing in treatment with every other month dosing is crucial.

Okay. And if I could ask a follow-up? So a lot of the pays we've talked to are looking for continued improvement over time and maybe separation of results that you've shown in the segment data every 6 months. But as far as expectations for 24 months, I guess you've somewhat downplayed what we might be able to see at 24 months. But if there is no further separation, do you think physicians will continue to treat long term? Is this something that we have an idea of, is it just they're looking at sustainability? Or do they really want continued separation?

Yes. No, Thanks, Annabel. I think, look, if you continue to save photoreceptors, the way we believe you will, right, even if that is a linear saving, so if you say around that 20% or even a little bit below that for a reduction in the growth of geographic atrophy based on the research that we did with the retinal community that is sufficient, should we get an increased effect over time that would, of course, be very exciting and something that we can then explore if that occurs. So it's not, we believe the requirement for adoption of this drug.

Our next question comes from Joseph Stringer with Needham.

This is Ben on for Joe Stringer. Just a quick one. You kind of mentioned a little bit about the EMPAVELI payer mix. I think I heard around 25% Medicare, but just the overall payer mix, would you still characterize that as relatively stable around 50-50? Or do you expect that trend to continue or change?

Thank you. I'm going to hand that over to Adam.

The majority of EMPAVELI's value comes from commercial payers, and as previously mentioned, 25% of it is from the Medicare population. I expect this trend to persist.

Our next question comes from Douglas Tsao with H.C. Wainwright. Your line is open.

Congrats on the progress. Just maybe as a follow-up, you made the comment about a lot of trying to start patients early, especially with every other month dosing. I'm just curious, how do you think about providing guidance to clinicians about when the time might be appropriate to switch a patient from every other month dosing to monthly dosing?

Thank you for the question, Doug. There is a dose response, but the increase in benefit from switching to monthly injections compared to every other month is not double. However, for patients with full-field encroachments who are at risk of losing central vision, especially if they have already lost vision in one eye, there is a strong incentive to maximize efficacy. We will continue to evaluate this over time. Additionally, offering every other month dosing is important strategically. We have the first mover advantage, data showing results up to 18 months, and our patient profile includes those with both foveal and extrafoveal lesions. We believe this approach addresses all patient populations affected by the disease, whether in the early or late stages, and it can significantly help in preserving receptor cells in the long run.

And I'm not showing any further questions at this time. I'd like to turn the call back over to Cedric for any remarks.

Thank you so much. My closing remarks are not opening, so closing. I just want to thank all of you for joining. We are really excited about the progress that we have made and what's ahead for us. In September, we will report the 24-month data, and we will be around later today and tomorrow, should you have any additional questions. Thank you again for joining us today, and have a wonderful rest of the week.

Well, ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.