Baird has maintained its Outperform rating on Apellis Pharmaceuticals (NASDAQ: NASDAQ:APLS) and increased the stock's price target to $96 from the previous $86. The adjustment follows the announcement of positive Phase 3 trial results for the company's drug pegcetacoplan, aimed at treating two rare and serious kidney diseases known as C3G and IC-MPGN.
The company recently reported results that exceeded expectations, showcasing pegcetacoplan's potential in the medical field. The drug demonstrated roughly double the effect on the primary endpoint compared to its anticipated oral competitor, iptacopan.
Despite the muted stock reaction, possibly due to the expected competition, the data suggests a significant advancement in treatment efficacy.
Baird's analyst believes that even with a conservative estimate of 20% peak market penetration, pegcetacoplan could represent an additional $500 million+ opportunity in the U.S. market.
The inclusion of this new opportunity in their financial model justifies the $10 increase in the price target for Apellis Pharmaceuticals.
The optimistic outlook is based on an 80% probability of success (POS) for pegcetacoplan, considering its strong performance in clinical trials. The analyst reiterates the Outperform rating, indicating confidence in the stock's future performance and the company's growth prospects.
Apellis Pharmaceuticals has been making significant strides in its research and financial growth. The company reported encouraging results from its Phase 3 VALIANT study, with its investigational drug, pegcetacoplan, showing a 68% reduction in proteinuria, a marker of kidney damage. This development led Jefferies to maintain a Buy rating on Apellis and increase the price target to $82.00, up from the previous $80.00.
The positive data from the study has led to a projected increase in the peak sales for pegcetacoplan in the treatment of C3G and membranoproliferative glomerulonephritis to around $1 billion. Apellis plans to submit a supplemental new drug application to the U.S. FDA in early 2025 due to these positive outcomes.
On the financial front, Apellis reported robust growth in the second quarter of 2024. The company's drugs, SYFOVRE and EMPAVELI, performed remarkably well, with SYFOVRE achieving over $0.5 billion in sales since its launch and $155 million in net product revenue in Q2 2024. EMPAVELI also generated substantial revenue with $24.5 million in sales.
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