Apellis Pharmaceuticals said Thursday it expects European regulators to reject its eye disease treatment, Syfovre. APLS stock fell, tumbling below its 200-day line.
Syfovre is an injection that treats geographic atrophy, a disease in which lesions start building up on the outer retina and then progress, causing eventual irreversible vision loss. But Syfovre has struggled in the U.S., where it's approved, due to new safety issues. The Food and Drug Administration just updated the label to show Syfovre carries the risk of inflammation and fluid becoming retained in the eye.
Those struggles are now cropping up in Europe where Apellis said it expects the Committee for Medicinal Products for Human Use to issue a negative opinion about pegcetacoplan, the test name for Syfovre. If that happens — likely in January — Apellis said it will ask the regulator to reexamine its decision. That process could take four to five months, pushing approval out to May or June.
"We're not terribly surprised by the news, as it is consistent with our more cautious view of Syfovre's commercial prospects," Mizuho Securities analyst Graig Suvannavejh said in a report.
On today's stock market, APLS stock plummeted 17% to 52.18.
APLS Stock: Facing Off With Regulators
Suvannavejh is bearish on Syfovre's prospects for snagging approval in Europe. European regulators are generally more cautious when it comes to analyzing the risks and benefits of drugs, he said.
"We believe it is more likely than not that Syfovre does not get approved in Europe, unless newer information regarding risk/benefit are provided or come to light," he said.
In the U.S., the struggles are apparent. Earlier this year, the American Society of Retina Specialists posted an advisory that a small number of patients experienced a type of eye inflammation called occlusive vasculitis after receiving a Syfovre injection. APLS stock crashed 19.6% on July 31, despite beating Syfovre sales expectations. The company confirmed the issue in its second-quarter earnings release.
In August, the company said it found "internal structure variations" in the 19-gauge filter needle used to withdraw Syfovre from the vial. It said doctors should only use kits that include the 18-gauge needle.
But update remains slow in the U.S., Suvannavejh said.
"Unlike wet (age-related macular degeneration), geographic atrophy is a slow-progressing disease whereby treatment may not be adopted broadly," he said. Further, "Safety concerns regarding serious eye inflammation persist, and based on our due diligence, (are) holding back uptake."
He kept his neutral rating and 49 price target on APLS stock.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
