Apellis Pharmaceuticals, Inc. Price & Performance (APLS)

Thank you, Meredith, and thank you all for joining us this morning. As we close out another year, I would like to recognize the progress our team has made. We achieved important milestones in 2024 strengthening our business while navigating some headwinds along the way, Sypholstery generated over 120% year over year U. S. Net revenue growth. Presented positive Phase three VALIUM data with EMPAVIDI C3G and ICM PGN we advanced our earlier stage pipeline and we fortified our financial position. Looking ahead, our strategy is focused on three key pillars: First, to transform the treatment of geographic atrophy with CyFOVRI. Second, to maximize IMbAVERI's impact in rare diseases. And third, to advance our innovative pipeline leveraging our expertise in complement SENT. Starting with Pillar Number one. XIFA3 is the market leading treatment for geographic atrophy in The U. S. With more than 510,000 injections administered through December. Recent regulatory developments within the competitive landscape confirm our view that XIFAV is the leading treatment for GA. SAFOLF free is unmatched, free survival being labeled which includes increasing effect over time and flexible dosing, will enable us to further strengthen Safhold's market leaderships Cyphobri has generated nearly $900,000,000 in sales in less than two years making this one of the most successful launches in recent history, With only two approved treatment options available, and no new competitors on the horizon, we are in a strong position.

Our two key priorities heading into the rest of 2025 how to secure SEF for this leadership and to grow the overall GA market. We are still in the early phases of growth and estimate that only half of diagnosed GA patients are seen by an eye care professional Of those less than ten percent are receiving treatment. Building a new market takes time but we have the right product, strategy and team to execute. The U. S. Is our primary commercial focus for SAGEFLOVRI but we will continue to explore select international markets. We were pleased to receive approval from the Therapeutics Goods Administration in Australia last month And our regulatory review in Switzerland is ongoing. As we continue to focus our efforts on the Safo relaunch, we are also working to develop the next generation treatment for GAAP. To do this, we are combining SAFOVRI and APL which [indiscernible] This approach is designed to comprehensive [indiscernible] as well as the choroid through local and systemic C3 inhibition, plan to initiate a Phase II trial the second quarter. Shifting gears then to our second pillar, maximizing the impact of empathy in rare diseases. Embaretti continues to elevate the standard of care in PNH.

We also look forward to becoming a leader in nephrology, Starting with the anticipated launch of mPaveni in C3G and primary ICFPGMs. We recently filed the supplemental NDA for Embaheri based on the positive Phase three VALID These results hit the dry sector with unprecedented reductions in proteinuria, significant clearance of C3 deposits and stabilization of eGFR is more compelling was that these results were consistent regardless of disease type transplant status. For H. If approved, we expect to launch in the second half of twenty twenty five. Our partner Sobi recently received validation of its application putting them one step closer to making this life changing treatment available to patients in The EU. In the second half of twenty twenty five, we are also planning 20 CH Phase three trials for IMPAVEDI, in two new nephrology indications. Focal segment for glomerulosclerosis and delayed graft function. Lastly, our third pillar, our innovative pipeline. We are excited to be advancing the first ever gene editing approach targeting the neonatal Fc gamma receptor with our partner Beam Therapeutics. Look forward to sharing more about this program and our broader emerging pipeline with all of you soon. We are excited about the future of our Bendis.

We have two potential blockbuster products a robust development pipeline of clinical and preclinical programs and a clear path to profitability. Now turn the call over to David Etchison, our new Executive Vice President of Commercial. I'm sure many of you are familiar with David from previous earnings calls at investor events. And we are thrilled that he is now using our commercial organization David, Thank you, Cedric, and good morning, everyone. Let me start with Saphobri. With over 510,000 injections administered and nearly $900,000,000 in net sales, XIFABI has had a remarkable launch Our focus going forward is to both strengthen our leadership position and grow the overall market. The recent regulatory update from our competitor provides us more confidence than ever in the strength of Cyfobri's differentiated profile. Three things now are very clear. XIFABI has consistently demonstrated robust and increasing effects over time. XyphoBri is the only GA product approved for as few as six doses per year and Xiphobri is the only product in a preferred position with many payers. In the fourth quarter, XIFA maintained its market leadership with approximately 94,000 doses delivered to physician offices, including 89,000 commercial doses, and 4,600 samples. Total market share remained stable at over 60% and new patient share trended positively ending the year approaching 50%.

As of December, there are more than 2,300 sites of care that have ordered Cyphovari. CyFOVRI's fundamentals remain strong. In the first two months of twenty twenty five, we are seeing continued growth in the number of Xyphobia injections administered. Which is the true measurement of demand. There are however a few temporary factors expected to affect orders of commercial vials and net revenue in the first quarter. First, the overall GA market growth in the quarter has been tempered due to typical Q1 dynamics like Medicare reverifications, and winter storms affecting distribution and patient visits. And second, we have also seen a spike in sample usage over the past two months. We believe retina specialists are using more samples because of a reported funding gap at non for profit co pay assistant organizations. We estimate there could be 5,000 or more incremental samples used in this quarter as compared to the average quarterly sample volume in 2024. The momentum we are seeing in injection demand to date since the stage for continued growth in 2025 and beyond. Maximizing the GA opportunity will require a long term and strategic approach. We need to make sure each patient has access to a retina specialist who can treat them.

We need higher utilization from those physicians who are already treating patients with XyphoBrid as well as adoption by retina specialists who may have initially been hesitant to utilize GA treatments. And we must continue to further strengthen our formulary positions. Being the only GA products with preferred status provides a significant competitive advantage. We're executing across key initiatives to achieve these goals, including broadening our reach to the eye care community, amplifying real world data through key forums, educating payers on Xyphofri's differentiated value and proposition and connecting with patients through our DTC campaign. We recently launched Phase two of our DTC campaign featuring Henry Winkler. This campaign focuses on increasing awareness of GA, ANSYSFOVRI and ensuring GA patients are able to connect to a reno specialist who can treat them. Now let me shift to Empovelli. The commercial and medical teams are ramping up their efforts in anticipation of Empobelli's and ICMPTN later this year. We are in the process of hiring our field based team. Which will allow us to hit the ground running and make a significant impact in the early phases of the launch. Ahead of approval, we are executing several pre launch activities focusing on disease state awareness.

These include participation in key nephrology conferences, building relationships with key physician accounts KOL and payer engagement, and patient education. These activities maximize the likelihood of a successful launch in C3G and ICMPGN. They also reinforce our commitment to rare nephrology with our programs in DGF, and FSGS. The commercial opportunity is significant with an estimated 5,000 C3G and ICMPGN patients in The U. S. Empavelli is the only drug to be studied in a broad patient population. Given the strength of the Phase three data, we believe Empavilli will be used across all patient groups and disease severity. Physician feedback has been consistent that treatment choice will be based on efficacy over the route of administration given the severity of C3G and ICMPGN, Many patients, even those with mild to moderate disease, will eventually suffer kidney failure. In PNH, Empravelli generated $23,000,000 in U. S. Net product revenue in the fourth quarter. Compliance rates remain high at ninety seven percent and the safety profile remains consistent with our previous updates. We expect continued competitive pressure in 2025 but this should be more than offset by initial revenue generated from C3G and ICMPGN.

With that, I will now turn the call over to Caroline. Thanks, David, and good morning, everyone. I'll start with SYIFOVRI, We continue to see evidence supporting Syphovary's strong efficacy and consistent benefit to GA patients over long periods of time. Earlier this month, we presented forty eight months data from our GALE extension study That's reinforce Xyphobia's increasing effects over time. These data demonstrated that early treatment with Xyphobia leads to preservation of retina tissue at magnitudes of approximately 1.5 disc areas on average at forty eight months in noncophobeal GA patients dosed monthly.

For context, 1.5 disc areas is the size of approximately two phobia areas, which is considered highly meaningful by retinal specialists.

We are also beginning to see real world evidence of the benefits of cyphovary treatment. An independent analysis of real world data concluded that by month nine of treatment, cyfovary reduced the annualized growth rate of GA by over forty percent. Separately, another analysis of real world data following cyphovretreatment showed stable visual acuity over multiple injections. [indiscernible] these results add to the extensive clinical data set for SIFOVRI and strengthen confidence in its treatment benefit. As Cedric mentioned, we are also developing a next generation treatment for GA. We believe combining XIFAVI and our siRNA APL-three thousand and seven may provide comprehensive complement blockade in the retina and in the choroid. Specifically, SYKOVRI inhibits complement in the retina and APL-three thousand and seven is intended to target systemic complement activity in the eye. With less C3 present in the eye following administration of APL-three thousand and seven, there may be an even Products as measured by the remaining levels of protein in the blood. We expect to initiate a Phase two study with Xiphonvri and MAPL-three thousand and seven in GA patients in the second quarter. Shifting to Empavelli, the Phase three VALANT results provided further confidence in MFLE's ability to control complement and provide a meaningful difference to patients with rare kidney diseases.

Based on these data and the strong rationale for complement inhibition, we plan to initiate two pivotal studies with Empavelli in the second half of this year. One, in Primary Focal Segmental Glomerulosclerosis or FSGS and one in delayed graft function or DGF. The complement pathway plays a significant role in both diseases and there are currently no FDA approved therapies. FSGS is a rare kidney disease that causes scarring of the glomeruli. Similar to C3G and ICMPGM, FSGS results in end stage kidney disease within five to ten years for approximately half of patients. There are an estimated thirteen thousand primary FSH patients in The United States. EGS is a complication in kidney transplantation the transplanted kidney fails to function and typically requires dialysis within the first week of transplant. This negatively affects the long term survival of the kidney and overall patient outcomes. In 2023, there were an estimated twenty one thousand transplants in The U. S. Using deceased donor kidneys. DGF occurred in thirty percent to thirty five percent of these transplants. FSGS and DTF were chosen due to their high unmet need significant complementary involvement and our ability to move directly into pivotal programs with potential approvals by 02/1930.

Given our leadership and expertise in complement, we are uniquely positioned to bring treatments to patients with these devastating diseases. I will now turn the call over to Tim for a review of the financials. [indiscernible] Thank you, Caroline. I will now provide an overview of our financials.

Additional details are available in the press release that we issued earlier this morning. Total revenue for the fourth quarter of twenty twenty four was approximately $213,000,000 including $168,000,000 in CyphoRe and $20,000,000 in Impa Valley U. S. Net product revenue. Total revenue for the full year 2024 was $781,000,000 a nearly 100% increase as compared to 2023. Turning to the rest of the P and L. For the fourth quarter, cost of sales was $40,900,000 R and D expenses were $76,400,000 SG and A expenses were $121,500,000 and we reported a net loss of 36,400,000.0 Regarding Cyphovary, gross to net remained stable relative to the third quarter. We anticipate gross to net to be in the low to mid-twenty percent range through 2025. We took a 1% price increase on January 1 that intended to help offset some of the ASP erosion while managing customer reimbursement. We continue to execute against our strategy while maintaining financial discipline. We made strong progress from a financial perspective in 2024. As you can see on Slide 17, total revenue in 2024 nearly matches our non GAAP expenditure. With $411,000,000 in cash and cash equivalents at the end of twenty twenty four, we remain confident in our financial position.

We anticipate operating expenses in 2025 to be relatively stable compared to 2024. We expect our existing cash combined with our future product sales to be sufficient to fund our core business to profitability. I will now hand the call back over to Cedric for closing remarks. Thanks, Steve. We have started 2025 from a position of strength and are focused on building on the success of SAIFOBI preparing for our second commercial launch with EMPAVETI in C3 and ICMPGN, progressing our pipeline and solidifying our financial position. Doing this, we remain confident in our ability to create significant value for patients and shareholders over the coming years. And our first question will be coming from John Miller of Evercore ISI.

Your line is open.

Hi guys. Thanks so much for taking my question and congrats on all the progress. One on Empovelli and the kidney indications, I guess, and a quick follow-up on that. Obviously, your primary endpoint showed really great results. With a spot test in new ACR, but the competitor had a twenty four hour endpoint. I know you said in the past that you looked at twenty four hours, but we haven't seen it yet. Do you plan on presenting that publicly? I assume it was included in the submission to the FDA. Do you have a sense of which metric the FDA is most focused on? Some commentary and that would be great. Hi, John. Thank you so much for that question. So look, we're very excited about the submission with MPAVETI, of course. And looking forward to feedback in short order. The twenty four hours was consistent with what we saw with the spots but the endpoint of course was the spot. Think what is really important here is not just the proteinuria, right, but the consistency that we had across all the phenotypes of this disease and across all kind of three important metrics that exist.

There is of course the proteinuria, which had such a highly clinically meaningful reduction we also had the EGFR stabilization. And in addition to that, and I cannot overemphasize that, the impressive results on the histopathology. Right? I mean, so when you look at these kidneys, you see the C3 deposits go away. Melting like slow in the sun quite frankly over the course of a couple of months and after six months as much as seventy percent of patients have no more detectable C3 deposits. So that's something really important to bear in mind. We're excited about the submission about what we can do for patients. And submission for the publication will come out soon as well.

All right. Thank you. Maybe just as a quick follow-up, given recent news coming out of the agency, I'd love to get a sense of your confidence level that you'll be able to launch in second half of twenty twenty five that agency will be able to meet its PDUFA requirements and you'll get a timely review? Yes.

So of course, we have no control over macro, but at the current point in time, there is no indication at all that there is any type of delay.

Thanks so much.

Thank you.

For our next question. Our next question will be coming from Tazeen Ahmad of Bank of America Securities. Securities. Your line is open, Tazeen.

Great. Thank you. Good morning, guys. I have a couple of questions. Size ovaries. So just based on the metrics that you've cited or really trends in the first quarter, how should we be thinking about results in the first quarter relative to 4Q? Could it be that sales would be lower this quarter for the reasons that you mentioned? And then, regarding the the beneficial status in Medicare Advantage. Do you think that that's going to have an early and noticeable impact on new patient share in the year? Or do you think that's something that would happen more gradually? And then I have a follow-up. Thanks.

I'm going to hand it over to David. Hey, it's Steve. It's David. Hope you're doing well. Thank you for the question. So like we talked about in the in the call, some of the things that we're seeing in Q1 are transit impact to what we think will impact net revenue. And while they're anticipated to be temporary, we do think that Q1 will be lower than Q4 as a result.

And we're not going to guide on anything for Q1 beyond that. But that's where we are currently at least with what we've seen so far.

The other thing to note too, by the way, is one of the things that is is really positive for us is that the good news we're seeing injections which we talked about in the call as well, grow in Q1 versus Q4. Which is is very positive for us. And we expect so once we get some of these temporary impacts against the Q1 numbers out of the way. We should see and continue to see and expect to see 2025 to have growth.

Okay. And then my follow-up is about the label chain. That was made for the competing product. How important is it that the label for iSurvey will say monthly inject relative to every other month because it does seem based on our doc checks that up until now Docs seem to have adopted every other month. Do you think that that practice will change? Yes. So look, I think it's a little bit early here, right, in regards the label change. I think there's still some things here that folks are still trying to figure out. I will tell you, myself and Caroline, which I'll hand to in a second for some comment, we were at the Maculus Society when this came out, which is a prestigious meeting that was held in Florida. And the general talk and discussion was around site fob rates. And the every other month dosing. I think the more important part was to follow on to that, which is we had a lot of robust data that was presented at that meeting. That really helped us to solidify even further that Xyngfobre is consistent increased effects over time is going to have impact And is it having impact?

That was a lot of the discussion Plus, we're the only product that is can be treated and it's in the label for as few as six doses a year.

And we're the only product that has preferred positions with payers. That was the conversation at Macula Society. So, I'll hand it over to Caroline for additional comments.

What I hear from my colleagues and what I know from physician is that efficacy and convenience are really important driving factors for for patients, physicians and payers. And we have consistently demonstrated efficacy with every other month dosing. This has not been demonstrated with iZURBATE in a clinical trial.

And the FDA did not approve them for every other month dosing. So our label includes all of our benefits, our efficacy flexible dosing regimen that includes monthly and every other month dosing.

Our next question will be coming from Anupam Rama of JPMorgan. Your line is open.

Hi.

Thanks for taking the questions. Is actually Malcolm Cuno on for Anupam. So with the I survey headwinds over the last several months and the updated label, what are you hearing from payers on the potential for preferred tiering for Cytobera?

Yes, welcome. Thank you. It's David. Thanks for the question. So we're really fortunate to have a number of payers and sizable plans to have us in a preferred position. I think it's a little hard to forecast what that looks like. But I will tell you, when we look at and have conversations with the payers, it really comes down to every other month dosing and the fact that we have it in the label with the efficacy that matches up to that. So those are the things to keep in mind. And we'll see what happens in the future, but I can't really predict what will happen moving forward with the payers. At least this point in time. Great. Thank you.

Thank you. One moment for our next question. Our next question will be coming from Salveen Rich of Goldman Sachs. Your line is open, Salveen.

Good morning. Thanks for taking my question. Could you give us a little bit more color on how we should think about the cadence of the SysoVRI launch here in 2025, just given the commentary on 1Q being lower than 4Q, but there's growth in 2025 and also in the context of a potential label update for iSurvey and the formulary status and expansion ex U. S. Thank you, Saline. So I think first of all, really important to bear in mind injections continue to grow. Right? And that is reflection of the unmet need in this disease. Remember, fewer than ten percent of patients with geographic atrophy has been treated and only about half of patients are currently being seen by accurate professionals. The opportunity there to do good for patients and to generate revenue is enormous as it has always been. So is as far as the overall market is concerned. Competitively, quite frankly, I think we are in an enviable position right now. Last year, of course, we went through several motions. But at the end of the day, I think important to bear in mind that the CRL for our competitor beyond whether it's resolved or not now really called out the shortcomings that our competitor has most notably the fact that there is or that there was a twelve month limitation initially, which a lot of physicians did not know.

And then of course also the lack of data for every other month dosing. So I think it was important to kind of level set the knowledge around two products so that physicians can take the right medicine. So we're very excited about where 2025 is heading. And beyond as well.

Thank you. And one moment for our next question. Our next question will be coming from Yigal Nochomovitz of Citigroup. Your line is open.

Hey Cedric and team, thanks for the question. I had a question on the combo trial with seven and SIFOVRI. How are you thinking about the phasing of the dosing there?

Given the intravitreal and the systemic are you going to interweave them? Or can you just talk more about the strategy for that combo dosing? And then will this Phase two have any comparison arm or is it just going to be a single arm study? Thank you.

Thank you so much, Yigal. So we're super excited about our 3,007 program and you are asking as usual an excellent question, which is we've thought carefully through how to implement this in a physician setting, right? So the idea there is that with a subcutaneous ejection, if you lower the systemic levels of C3, So turning off the faucet if you want and you give a stoichiometric advantage so dosing advantage to say, for free, we should still need NDA control the enzymatic activity of the complement cascade We will synchronize those injections to every two months and every three month administrations both of which for the intravitreal and the subcutaneous, both of which would happen in the physician's office. So I think that's something really important. There will be a dosing component to this as usual so that we can explore those two separate pathologies. But in the broader strategic context, I mean, we're looking forward to this year to growing the market in GA truly establishing ourselves as we are the market leader, but growing that share that we have and then also to what we subjectively, of course, but believe will be one of the, if not the most exciting developmental program in geographic atrophy by the end of this year and into 2026.

Thanks. And maybe one for Tim. Just on EMPovelli, obviously, you have a ton of really interesting larger indications coming down the pipe. As you've alluded to the C3G, the CCMP, MPGN, FSGS potentially, DAGF. So as far as the patent looks like, do you have any comments on how you might even further given the potential for a very significant revenues on these follow on indications. Yes, sure. If I heard you you correctly, you asked if there was a way to kind of extend our exclusivity. Is that I understand that from a patent perspective? Yes. So if we have composition of matter through kind of 2020, thirty three ish and two thousand and thirty five with customary extensions. So So that's still pretty reasonable runway for the indications that we discussed and we discussed that those are both chosen because we believe that we would have the ability to launch those but a significant amount of patent life left. There are other things that we have in mind. We also have, as Cedric mentioned, some combination product work ongoing that could really change changed our the profile of our systemic administration of pig COVID-nineteen. So we're looking at life site cycle management initiatives as well.

But from a composition matter perspective, 2035 is really where that runs out.

Okay, got you. Thank you. One moment for our next question.

Our next question will be coming from Collyn Koozie of Baird. Your line is open, Colleen.

Great.

Good morning. Thanks for taking our questions. Congrats on the progress.

So you've had some strong momentum on the payer front last year. Can you put into context what percent of the market you have preferred positioning in? And how much more growth on the payer front do you expect achieve in 2025? Thank you, Colleen, and good to have you back. So I'm going to hand it over to David.

Hey, Colleen, good to hear from you and thanks for the question.

So we've got some big plans like Aetna is a great example that as of January 1, has us in a preferred position and patient has to start with Cytoberid before they could move to the competitive product.

So there's some big plans that are out there. I think percentage wise, it's a little bit hard to to talk through that because there's so many intricacies in the plans on they actually look at this. And downstream accounts in particular to the PBMs can make their own decisions on on what they want to do with that. So but I will tell you, we have a number of sizable plans and two major PBMs that have us in a preferred policy position for their downstream accounts to make those decisions on.

Great. That's helpful. Thank you. And then for C3GN, ICMPGN, have European regulators and U. S. Regulators historically approached that review similarly? Since we've seen some positive momentum on the European opinion front, just wondering how that decision might have read through to The U. S. Review?

Yes. So it was thank you so much for that question, Colleen. So our partner, Sobi and Aperis, have been in lockstep through all of this. And we're very excited about the global deployment of Embravelli in The U. S. And Asparvelli ex U. S. Of course. I think what's and again kind of highlighting what we've mentioned many times. In The U. S, for example, we estimate there are approximately five thousand patients We estimate and we believe that we will only be competing only other products should it be approved and maybe on the market by the time we get there. For about 1,000 out of those 5,000. So it's a really special opportunity for us and the numbers quite a bit higher than 5,000, a really unique opportunity that deserves the prioritization that it gets within Aperis as well as with our partners. So Great. Thanks for taking our questions and congrats on progress.

Thank you. One moment for our next question. Our next question will be coming from Phil Nadeau of TD Cohen. Your line is open.

First, a follow-up and another question. The follow-up is on your comments you made about the sampling. Can you go into a little bit more detail on the dynamics of why there's a funding shortage and gives you confidence that this is just a Q1 issue and it won't persist later in the year?

Sure. Thank you so much, Phil. So look, the settling are reflection of a couple of factors. But one that stands out is what we spoke about that provide support to physicians to help with the co pay of the product. That is not just for Saphyrid, but for all intravascular injections. And it's important to note that we do not have real visibility on on how this is managed. This is by design and it should be appropriately these are independent organizations that determine how they manage their fundings. So we contribute, others contribute, We typically contribute at the beginning of the year, but it can happen throughout the year from other organizations. It has happened before that they ran out. So what then typically happens is that physicians will go towards sampling to be able to still take care of those patients, right? So would say that the increase in samples is a reflection of the fact that these patients are in need. There is a hopefully and then by all expectations temporary funding gap physicians compensate for that with template. Got it. That is helpful. And then broader question on MPovelli and C2G and ICMPGN. In the slide deck, you outlined four buckets of patients with that that disease.

Can you talk about how you're going to focus marketing? For example, will you focus on post transplant patients where you're likely to be the only option? Or, are there other elements or physicians that you think are highest priority? Well, thank you so much, Phil. So So again, I think you Going on something that we're particularly proud of, which is that when we studied these diseases, we went very broad, right? We said we're going to study C3G as well as I see a PGN, which are split about fifty-fifty. In the population that we are targeting. We looked at pre transplant, but also post transplant, which is a segment that often gets neglected. We studied pediatric patients as well as adults And we studied what happens in this disease sometimes C3 is depleted, sometimes it's not. We studied everything. And everywhere we saw a consistent response as far as the impact on the disease was concerned, So what that means moving forward, because I think what you're asking is, is where is the where are the initial demographics. I think the post transplant segment is a particularly interesting one. I think it's also worth noting that within this small community of transplant nephrologists, Faberdi is taking on quite a pristine reputation, not just because of the data that we had at Valiant but also because all of the recent xenotransplants, so you may have seen in the news the kidney transplants that are happening from genetically modified pigs.

Our transplants that were either rescues with Ambafedi or are now in all cases as far as we know proactively being protected with EMPHEREVITY. So I'd say the reputation of EMParelli to be able to control complement within the kidney is growing steadily and something that of course bodes well for our launch later this year.

That's very helpful. Thank you.

Our next question comes from Akash Tewari of Jefferies. Your line is open.

Hi. This is Cathy on for Akash. So on a sales of earnings call, they stated that docs were essentially warehousing patients and pausing their iServe doses.

Until the twenty four month label update rather than shifting them to SIFOVRI.

And then as such, they were expecting a bolus in March once dosing resumes.

So given that I survey this label got updated a couple of weeks before the PDUFA with the two year data on the label, but without every other month dosing. What are you seeing in terms of SIFO3 versus iServe uses in the past few weeks? And then what should we expect regarding dynamics on Cyphro-three versus iSurvey going forward?

And then what do you think your team needs to do to change, doctors' perception?

Yes. So I think I will answer the first part and then I will hand it over to Caroline. Talk about doctor perception, which of course is very important. But I think look, there may have been some warehousing with certain physicians, with certain patients. The take home very clearly here is that we are definitive market leader and we are growing SaaS leadership. That is very clear from all of the intelligence that we have internally at Aperis and something that is rooted in the data that we have, right? So I think that is the key message for us and I'll hand it over to Caroline to talk about how physicians currently view the device. Thank you, Cedric.

Well, we hear a lot from our physician colleagues We just attended three major meetings, most recently the MACI Society. And physicians are very enthusiastic about our differentiated efficacy data and our long term data. Mean, we presented tissue saved and so much tissue that was that was over a disc and a half of retinal tissue that's saved with site overuse and we presented long term data Patients who've been treated with Cyphovari for forty eight months. So this is really unprecedented. And this is the key driver amongst physicians. I think that [indiscernible] In the end, that physicians really speak to scientific data and it's very meaningful for them.

Okay, understood. Thank you.

And then just like a super quick follow-up. It seems like like could you provide some more color on inventory in Q4, because it seems like quarter over quarter sales growth was about 10% versus Vyle growth was about 5%.

Thank you.

This is David. So thank you for the question. Coming out of Q4 and usually you'll see in any given quarter at the end of a quarter some move in regards to orders that will move inventory a little bit. We saw a little bit of course coming out of Q4 and sometimes you'll see a little bit more around the holidays. But it did not put us in a situation that we were out of the typical two to three week range that we have.

And we may see a little bit of drawdown in the front of Q1, but for the most part, it was not a significant number that we could concerned about in anyway.

Got it. Understood. Thank you.

Thank you. One moment.

For our next question, Our next question will be coming from Ellie Merl of UBS. Your line is open Ellie.

Hey guys, thanks for taking the question. In terms of GA, I guess what's the latest that you're seeing in terms of patient adherence and what you're seeing in terms of any discontinuations, I guess sort of how we should be thinking about long term what the discontinuation rate or compliance on therapy might be.

And then just a second question in terms of your [indiscernible] I guess what do you expect in terms of this dynamic in 2Q and the rest of the year? So you mentioned this was a temporary funding gap in the patient over the course of the year in terms of the number of samples? Thanks.

Yes.

Thank you so much, Eli. So first of all, as it relates to the difference we actually see adherence levels for CYF4 really be similar what we have or what you find with anti fibrosis. Which is a very positive trend considering that NFHS is kind of more viewed as an acute treatment with an immediate benefits whereas I foresee as we all know you make an investment in the future protection and these large amount of tissue that you can preserve if you are faithful to the product. So that is something that have no concerns around. As it relates to the samples, I will have David answer that.

Yes. So I think a couple of things. And just remember upfront, I think it's important to remember that samples being requested and put into a patient for treatment is a sign of demand, which is very positive for us. And we're seeing the injections increase in Q1 versus Q4. So we feel good about that. I think a couple of things. First of all, we believe this is temporary and we anticipate that these issues that we're working on that samples are being used in place of a commercial product will be fixed over time. We don't know what that looks like as far as timing. And the funding gap and when all of those things kind of come together that Cedric mentioned, it's really it's in the control of the groups that that manage this with patients and with physicians. So we really don't have an answer to that. But we will continue to supply samples if needed and from patients in a place where they can be treated.

Got it. Thanks.

Thank you. One moment for our next question.

Our next question comes from Annabelle Samimy of Stifel. Your line is open, Annabel.

Hi. Thanks for taking my question. So I'm just trying to understand the competitive dynamics a little bit.

Better for Syscovery. Can you help us square away comments about leadership position of greater than 60% share, but then new patients is more like fifty-fifty and then we've got competitive headwinds coming from the label expansion, but then you talk about positive trends in injection growth, preferred formulary status, and positive feedback that you're getting from the community around efficacy and flexibility of Cifovari. So I guess maybe you can help us really understand what that competitive headwind is That is pushing the new patient share to fifty-fifty. Because it looks like everything is sort of lining up well for SifoRev, but I'm not Sort of.

Able to square away why it's still fifty-fifty for the new patient share.

Yes. Thank you, Annabelle. I think, look, We'll see where it ultimately will end up, of course, right? I mean, we're but the direction is positive for us, right? So but I think most importantly, Even a couple of months ago, I think we were in a competitive situation where the data or the knowledge around our competitor was, I would say, weak in the retina community. As far as it relates to what does this drug actually do. What does it do in the long run, A lot of physicians, as I mentioned, know that this drug was only approved initially for a one year period. So that was called a a net of surprise. So I think that there We are now playing in a level playing field and the level playing field the differentiation on efficacy incredibly robust, right? And that is being recognized by Rental doctors. And that's not just on the magnitude basis, it is also on the longitudinal data. And I would say that a real turning point for us Then we're looking forward to working from. I don't know, Karana, if you want to add something.

Well, I think one of the things that really differentiates us with physicians is that every other month dosing. And we use clinical studies to guide us. And the [indiscernible] data we have that the heterogeneous broad patients that were studied all show the demonstrate the efficacy into year four. Every other month dosing, which will just increase the convenience and help patients stay compliant. So I mean, physicians continually come up to me we're grateful for what we're presenting and show that this long term and every other month dosing is speaks to their patient population.

Okay, great. And if I could just ask a question on C3G, MPGN launch. What are your expectations there? You're not So, Walter is clearly going to mess him out a little bit earlier, but you did mention that physicians are a little bit more focused on or a lot more focused on efficacy. But I'm curious, the level of urgency patients have to get on treatment. And so what can we expect for, I guess, an early launch trajectory for that product?

Yes. Thank you, Annabel. I think the key thing is that we we see demand in the request that we already get for competitive use and expanded use access, Brett. So the demand is very important. Remember, these are younger patients, about half of whom over a 10 year period, which is not a lot when you're 20 or 30. A fifty percent chance of losing their kidneys. So the need is incredibly high. And again, I want to emphasize that based on the data that we have, we will probably be competing probably only for about twenty of that overall bucket of patients. So a really important opportunity for us and for patients.

Okay, great. Thank you. Thank you. Our next question will be coming from Douglas Tsao of H. C. Wainwright. Douglas, your line is open. Hi, good morning. Thanks for taking the questions. On First question I had was in terms of the Surna plus Typobi products, Cedric. I know in the past you've spoken about [indiscernible] a very powerful effect on preservation of photoreceptors and less so on ART Apellis. And so I'm just curious with this approach, is this sort of what you're specifically by going after the chloric, which is in which is sort of adjacent to the RPA as well?

Well, Doug, I'm very impressed with that question. You are correct. This is so the impact that size 40 has on the photoreceptors near perfect, right, about 100% when you look in the first six months. I mean, it is it's incredibly robust impact on those photoreceptors. The RPE cells are the ones that continue today, of course, meaningfully slow down. And then the question that we're trying to answer here is since if we on the choroidal side, right, on the back of the eye, if we can lower C3 levels, Will we be able to impact the RPE sales in a way that is similar to the photoreceptors. So excellent question and the answer is yes.

Okay, great. And then just a quick follow-up for David. Just I'm curious to the extent that you anticipate seeing an impact on the Medicare redesign for this year?

Or if you can sort of quantify it at this point? Hi, Dave. Thank you for the question. I think quantifying that is is challenging. For us. And I would hate to take a guess at it, So it's something we're looking at. We've got a whole team, of course, that manages all the things that we do with payers. [indiscernible] in our space with CMS, but I don't think I can quantify that at least at this time. Okay, great. Thank you so much.

Our next question will be coming from Joseph Stringer of Needham and Company. Your line is open, Joseph.

Hi, good morning and thanks for taking our questions. Two from us.

Just wanted to to get your updated commentary on any on the switching dynamics between XIFAVI and IZURVEY? And secondly, I know prior question asked about adherence rates, but just curious what about compliance rates for Zifrovary, for example patients missing or skipping injection, how does that look or how is that changed over time? Thank you. So this is David. Thank you for the question. A couple things, I think Cedric and Caroline touched on already some of the compliance where we fall with Cyt Fulbrity.

And it's about in the same range as anti VEGF. So actually I feel good about that because for us to be in the the GA treatment area with something that's that compliant, I think it's very positive because it is a disease, but it's definitely slower than what AMD As far as far as the question on the dynamics of switching, so we look at this on a regular basis. I will tell you that we've had a number of weeks, especially during the CRL period that they had for the competitive product that we saw a number of switches And I still think we're seeing that today.

In the first part of the front end of Q1.

And the good thing is and I think what's driving my thinking around that is the fact that we are seeing an increase in injections in Q1 versus Q4.

And I think that we're in a good place to see growth overall in 2025.

Our next question will be coming from Lachlan Hanberry Brown of William Blair. Your line is open.

Hey, guys. Thanks for taking the question. I wanted to ask more about the efforts you've made to get doctors off the sideline. You said that the sort of shift towards the efficacy focused messaging is resonating well with physicians, but I'm wondering you can sort of translate that into any changes of actual prescribing behaviors or new prescribers? Yes. So that is what we are seeing. And thank you for that question. I think what is what is gratifying after three years of launch now is that the data becomes very clear, right? We have the extension study, the data becomes much more concise. To communicate and main message at Magdalena Society, which is one that I think really resonates the most is that if you are on four years of treatments, with XIFABI, you can have up to three square millimeters of retina preserves, right? Three square meters of retina is 1.5 disc area. It's a huge amount of real estate in the back of the eye. That is when you tell physicians that it resonating fairly well.

Is the reality of this drug and one that we now really use moving forward. The safety situation is very stable and efficacy is becoming the brand focus. [indiscernible] And a follow-up, if I may, sort of following up on Yigal's earlier question on patent life for Empovelli. Curious if you can give any color on what you had assumed for IRA price negotiations when you were doing the sort of business cases for FSGS? And DGF. I realize there's probably still more questions and answers there, but just would be great to get your thoughts on sort of what you'd assumed Thank you so much. So these are look, we did a thorough analysis after the readout of VALENT. In the kidney based on the premise that we have Clearly exquisite target engagements in the glomerulus. And we did the usual work that you do in that situation, the competitive Apellis, the biology, what can we do, with the cut in length of the drug and that is where it is to the CCC merge. So much more will follow [indiscernible] Our next question will be coming from Ryan Deschner of Raymond James.

Your line is open, Ryan.

Good morning and thanks for the question. Your expectations for gross to net in 2025 in a steady state evolved at all in the last few months?

And can you give us any more detail on what you're expecting to see in terms of timing and duration of the impact of the new DTC campaign on sales in 2025 and beyond? Based on what you saw in the prior campaign? Thank you.

Yes. Thank you very much for the question. I'll take the gross to net piece hand it over to David for the impact of the DTC. So we the simple answer is no. Our view on gross to that hasn't changed at all. At the end of the third quarter, we did guide to low to mid-20s throughout the course of 2025 and that remains the same. [indiscernible] Yes. Thank you, Tim. So I appreciate the question on DTC.

It's a little early. We started running that commercial on television with Henry Winkler in mid January. But I can give you one piece of information that happens that will give you an indicator of some of the early impact that we can see. We did have the commercial run during the Saturday Night Live fiftieth anniversary special, we had about 15,000,000 views on the commercial. Which was attributed to driving about 3,000 visits to our website. At that time. So we can see things like that early. It's going to take time for us to see the total impact throughout the next several months.

Excellent. Thank you very much.

And we do have time for one more question. And our last question will be coming from Derek Achchila of Wells Fargo. Your line is open.

Hey, good morning and thanks for taking the question. Maybe just two for Tim. I guess, how should we think about OpEx growth in 2025 relative to 2024?

Is there going to be a lot of growth coming from some of the R and D initiatives that you guys talked about? And just based on some of the seasonal factors and 1Q and the sampling, I guess how should we be thinking about gross margin trends through '25? Thanks.

Sure. So from the perspective of OpEx versus 2024, we said in our prepared remarks that we expect those to be more or less the same. I think that's probably the case when you think about what we've some cost savings from our European infrastructure some of which we scaled down That will be offset by some R and D expenditure that gets increased And then from the gross margin perspective, we don't guide on that. There's a lot that goes into gross margin that sort of moves around But from a sampling perspective, I think we gave you everything we could from the perspective of color on how we project that. We really don't have any visibility. What we do know what we did talk about is that we see an approximately 5,000 Vial estimated increase of samples in this quarter And so doing the math on that, you can kind of get to a reasonable idea of what our revenue is per vial. You can understand what that would be And frankly, that's That's That's the piece that we could right now kind of get into our gross margin impact in the first quarter, at least as an S Beyond that, we really have no visibility unfortunately.

Got it.

Thank you. And I would now like to turn the call back to Cedric Fenchwa, closing remarks.

Thank you so much and thank you everyone for joining us this morning.

If you have any follow-up questions, please feel free to reach out to Meredith. And this concludes today's conference call. Thank you for participating. You may now disconnect.