Apellis Pharmaceuticals said Wednesday it plans to ask the Food and Drug Administration to approve its eye-disease treatment in the second quarter, and APLS stock surged.
The decision follows positive test results for geographic atrophy patients who received the drug, called pegcetacoplan, for 18 months. Geographic atrophy is progressive degeneration of the macula, in which patients suffer from lesions on their retinas.
In a pair of final-phase studies, pegcetacoplan reduced the amount of lesions in patients. Researchers tested dosing regimens of every month and every other month. Some patients also reported exudation, the slow escape of liquid from their eyes, as a side effect.
On today's stock market, APLS stock popped 13% to 45.24. Shares are close to breaking out of a cup-with-handle base with a buy point at 50.12, according to MarketSmith.com.
APLS Stock: Improvement In One Study
Evercore ISI analyst Umer Raffat says the drug appears "very approvable." Apellis plans to request a shorter six-month review period. Roche, a competitor, estimates there are more than 5 million people worldwide with geographic atrophy.
"We continue to think that this is an approvable drug, with a highly supportive data package overall," Raffat said in a report to clients. "Variability has clearly been a challenge for the program, but the 18-month update is consistent with previous positive results and shows no new worrisome signals."
The company tested pegcetacoplan in two studies called Derby and Oaks. In the Derby study, patients saw 13% and 12% declines in lesions, respectively, after monthly and every-other-month dosing routines for 18 months. That improved from a previous update after a year of treatment.
Numbers from the Oaks study were better — 22% and 16% declines, respectively — but didn't show an improvement over the 12-month update.
Evercore's Raffat kept his outperform rating on APLS stock, noting it's still too early to determine if patients will continue to improve over time.
Side Effects Could Be Dose-Dependent
Wedbush analyst Laura Chico was more bearish on the results.
A single-digit percentage of patients reported exudations in both dosing groups. That's lower than the rate seen in another Apellis study called Filly.
"While the combined exudation rates in Derby/Oaks are lower compared to Filly at 12 months, there still appears to be a dose-dependent trend," she said in her note to clients.
She kept her neutral rating on APLS stock, but remains "cautious on the potential filing." If approved, this would be Apellis' second drug to hit the market in the U.S. Chico also has a 34 price target on shares.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
