Apellis Pharmaceuticals Refinances Existing Debt with Up to $475 Million Non-Dilutive Credit Facility from Sixth Street

• Apellis received $375 million in funding at close, with ability to access an additional $100 million
• Majority of initial proceeds used to buy out existing SFJ Pharmaceuticals development liability
• Significantly improves liquidity profile by eliminating $366 million in SFJ payments through 2027

WALTHAM, Mass., May 14, 2024 (GLOBE NEWSWIRE) -- Apellis Pharmaceuticals, Inc. (Nasdaq: APLS), today announced that it has entered into a non-dilutive, senior secured credit facility with Sixth Street, a leading global investment firm, of up to $475 million, with approximately $375 million funded at close. Apellis can draw down an additional $100 million under the facility at the company’s option prior to September 2025, subject to satisfaction of certain conditions. Additionally, the Sixth Street agreement also permits Apellis to access $100 million through a separate third-party working capital facility.

Apellis used the majority of the net proceeds to buy out the existing SFJ Pharmaceuticals development liability for approximately $326 million. This buy out eliminates $366 million in payments owed to SFJ through 2027, including approximately $200 million through 2025. Net proceeds to Apellis at closing will be approximately $32 million following the buy out of the SFJ Pharmaceuticals development liability, and fees and expenses associated with the transaction.

“With this transaction, we believe we are uniquely positioned to fund our core operations to positive cash flow without the need to access the capital markets. This marks a pivotal milestone for Apellis,” said Tim Sullivan, chief financial officer of Apellis. “Sixth Street is one of the top capital providers within the life sciences sector. Executing this type of deal with market-leading economic terms underscores the quality of our business and the aligned confidence in the opportunities that we have to create meaningful, long-term shareholder value.”

“We are proud to be supporting Apellis as it successfully commercializes two life-changing medicines. We are particularly enthusiastic about SYFOVRE® (pegcetacoplan injection), which in its first year has already helped many people living with geographic atrophy in the U.S. and has the potential to benefit millions of patients worldwide,” said Jeff Pootoolal, partner at Sixth Street. “We greatly value our partnership with the Apellis team and look forward to continuing to help them drive further growth and to realize their commercial and development goals.”

The new senior secured credit facility matures on May 13, 2030, and bears interest at an annual rate equal to the 3-month Secured Overnight Financing Rate (SOFR) + 5.75% (subject to 1.00% floor), with certain additional fees and prepayment terms. There are no scheduled amortization payments during the term of the facility, with all principal due on the maturity date. The credit facility obligations are secured by substantially all assets of Apellis, and the credit facility includes certain affirmative and negative covenants consistent with a facility of this type.

As of March 31, 2024, Apellis had cash and cash equivalents of $325.9 million.

TD Cowen acted as financial advisor and Wilmer Hale served as legal advisor to Apellis. Proskauer Rose LLP acted as legal advisors to Sixth Street.

About SFJ Pharmaceuticals Collaboration

In February 2019, Apellis entered into a development collaboration with SFJ Pharmaceuticals, a global drug development company backed by Blackstone Life Sciences and Abingworth, to support the development of pegcetacoplan for the treatment of patients with paroxysmal nocturnal hemoglobinuria (PNH). Under the SFJ agreement, SFJ paid Apellis a total of $140 million to fund the Phase 3 program for pegcetacoplan in PNH. Following regulatory approvals of pegcetacoplan for PNH by the U.S. Food and Drug Administration and the European Medicines Agency in 2021, Apellis was obligated to pay SFJ a total of $460 million in pre-determined annual payments on the anniversaries of each of the regulatory approvals. Apellis has paid SFJ a total of $94 million as of March 31, 2024.

About Sixth Street

Sixth Street is a global investment firm with over $75 billion in assets under management and committed capital. Sixth Street uses its long-term flexible capital, data-enabled capabilities, and One Team culture to develop themes and offer solutions to companies across all stages of growth. Sixth Street Healthcare and Life Sciences finances the development and commercialization of innovative therapeutics and invests in healthcare technology companies across all stages of growth. Investments in the sector include Arsenal Biosciences, Biohaven, Blueprint Medicines, Caris Life Sciences, Chroma Medicine, ConcertAI, Datavant, Immunogen, Ironwood, and Mammoth Biosciences, among many others. Founded in 2009, Sixth Street has more than 600 team members including over 250 investment professionals operating around the world. For more information, visit www.sixthstreet.com, or follow Sixth Street on LinkedIn.

U.S. Important Safety Information for SYFOVRE® (pegcetacoplan injection)

CONTRAINDICATIONS

• SYFOVRE is contraindicated in patients with ocular or periocular infections, and in patients with active intraocular inflammation
  

WARNINGS AND PRECAUTIONS

• Endophthalmitis and Retinal Detachments
  • Intravitreal injections, including those with SYFOVRE, may be associated with endophthalmitis and retinal detachments. Proper aseptic injection technique must always be used when administering SYFOVRE to minimize the risk of endophthalmitis. Patients should be instructed to report any symptoms suggestive of endophthalmitis or retinal detachment without delay and should be managed appropriately.
• Retinal Vasculitis and/or Retinal Vascular Occlusion
  • Retinal vasculitis and/or retinal vascular occlusion, typically in the presence of intraocular inflammation, have been reported with the use of SYFOVRE. Cases may occur with the first dose of SYFOVRE and may result in severe vision loss. Discontinue treatment with SYFOVRE in patients who develop these events. Patients should be instructed to report any change in vision without delay.
• Neovascular AMD
  • In clinical trials, use of SYFOVRE was associated with increased rates of neovascular (wet) AMD or choroidal neovascularization (12% when administered monthly, 7% when administered every other month and 3% in the control group) by Month 24. Patients receiving SYFOVRE should be monitored for signs of neovascular AMD. In case anti-Vascular Endothelial Growth Factor (anti-VEGF) is required, it should be given separately from SYFOVRE administration.
• Intraocular Inflammation
  • In clinical trials, use of SYFOVRE was associated with episodes of intraocular inflammation including: vitritis, vitreal cells, iridocyclitis, uveitis, anterior chamber cells, iritis, and anterior chamber flare. After inflammation resolves, patients may resume treatment with SYFOVRE.
• Increased Intraocular Pressure
  • Acute increase in IOP may occur within minutes of any intravitreal injection, including with SYFOVRE. Perfusion of the optic nerve head should be monitored following the injection and managed as needed.

About Apellis
Apellis Pharmaceuticals, Inc. is a global biopharmaceutical company that combines courageous science and compassion to develop life-changing therapies for some of the most challenging diseases patients face. We ushered in the first new class of complement medicine in 15 years and now have two approved medicines targeting C3. These include the first-ever therapy for geographic atrophy, a leading cause of blindness around the world. We believe we have only begun to unlock the potential of targeting C3 across serious retinal, rare, and neurological diseases. For more information, please visit http://apellis.com or follow us on Twitter and LinkedIn.

Apellis Forward-Looking Statement
Statements in this press release about future expectations, plans and prospects, as well as any other statements regarding matters that are not historical facts, may constitute “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding the anticipated benefits of the credit facility and the use of proceeds therefrom, including the buyout of the SFJ liability, the ability of the Company to achieve positive cash flow, the Company’s need to access the capital markets and whether the Company will access additional funding by entering into a separate working capital facility. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including whether the Company will be able to comply with the obligations, covenants and conditions under its credit facility, including its ability to repay the credit facility at maturity; whether the Company’s clinical trials will be completed when anticipated; whether results obtained in clinical trials will be indicative of results that will be generated in future clinical trials; whether pegcetacoplan will successfully advance through the clinical trial process on a timely basis, or at all; whether the results of the Company’s clinical trials will warrant regulatory submissions and whether systemic pegcetacoplan will receive approval from the FDA or equivalent foreign regulatory agencies for C3G and IC-MPGN or any other indication when expected or at all; the period for which the Company believes that its cash resources will be sufficient to fund its operations; the impact of general macroeconomic conditions, changes in interest rates and uncertain credit and financial markets on the Company’s business and financial position; and other factors discussed in the “Risk Factors” section of Apellis’ Annual Report on Form 10-K with the Securities and Exchange Commission on February 27, 2024 and the risks described in other filings that Apellis may make with the Securities and Exchange Commission. Any forward-looking statements contained in this press release speak only as of the date hereof, and Apellis specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

Media Contact:
Lissa Pavluk
media@apellis.com
617.977.6764

Investor Contact:
Meredith Kaya
meredith.kaya@apellis.com
617.599.8178