Apellis Pharmaceuticals reported an unexpected delay for its eye-disease treatment, leading APLS stock to crash and taking shares of Iveric Bio with it.
Late Thursday, Apellis said it planned to include two-year data from studies called Derby and Oaks in its request for approval of its drug, pegcetacoplan. The company is developing pegcetacoplan for patients with a condition in which the eye's macula progressively degenerates. Including the two-year data will likely delay the Food and Drug Administration's review of pegcetacoplan by three months.
APLS stock investors didn't expect the move, says Wedbush analyst Laura Chico. Apellis had long said it wouldn't need the 24-month data to gain approval.
The FDA was previously scheduled to make a decision on the Apellis drug later this month. Now, it appears Apellis is hoping the newest data will help strengthen the label for pegcetacoplan, if approved. The new approval date will likely be in February, she said.
"Having the 24-month data on board at launch would be preferred vs. seeking to have it added at a later point after approval," Chico said in a report to clients.
On the stock market today, APLS stock tumbled 16% to 50.42, leading a similar dive for rival Iveric. Iveric stock toppled 11.1% to 20.94.
APLS Stock: Large Patient Population
Chico holds a cautious view on APLS stock. The company is developing pegcetacoplan for patients with geographic atrophy secondary to age-related macular degeneration. In these patients, the cells of the retina are slowly degenerating, leading to vision loss.
The market is fairly large. According to some estimates, 1 million people in the U.S. have geographic atrophy. But pegcetacoplan also requires an injection in the eye and, therefore, a large number of specialists to deliver it. Chico has a neutral rating on APLS stock and a 59 price target.
"At present, demand outpaces capacity and while responding physicians (to a survey) indicated they could increase capacity, this would require investments in staff and physical footprint which may take time to unfold," she said.
However, any delays that require further testing of pegcetacoplan — leading to a potential years-long delay — could take her price target on APLS stock down to 31, Chico said.
Shares Have Been Consolidating
The move Friday pushed Apellis shares below the low point of a consolidation with a buy point at 70.10, according to MarketSmith.com.
APLS stock is highly rated, however. Shares have a strong Relative Strength Rating of 96, according to IBD Digital.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
