Apellis and Sobi Amend Partnership Agreement for Empaveli, Boosting Financial Outlook

Swedish pharmaceutical company Sobi has agreed to pay up to $300 million to reduce its royalty obligations on the paroxysmal nocturnal hemoglobinuria (PNH) treatment Empaveli, known as Aspaveli in Europe. This amendment to the existing partnership agreement with Apellis Pharmaceuticals marks a significant development in the rare disease drug market.

Financial Details of the New Agreement

Under the revised deal, Sobi will pay $275 million upfront and up to $25 million in potential milestones to Apellis. This arrangement will reduce Sobi's ex-U.S. royalty obligations on Aspaveli by 90% until certain performance-based caps are reached. The milestone payments are contingent on potential European Medicines Agency approval for Aspaveli in treating two rare kidney diseases: complement 3 glomerulopathy (C3G) and primary immune complex membranoproliferative glomerulonephritis (IC-MPGN).

The original 2020 collaboration entitled Apellis to tiered royalties ranging from high-teen percentages to the low 20s based on Aspaveli sales outside the U.S. Importantly, the new agreement does not affect Apellis' exclusive commercialization rights for Empaveli in the United States.

Market Performance and Future Prospects

Empaveli generated $98 million in U.S. sales last year, a modest increase from $91 million in 2023. In Europe, Sobi reported sales of Aspaveli at 333 million Swedish krona (approximately $35 million) for the same period. While these figures show steady growth, Apellis' top-performing product remains Syfovre, a geographic atrophy drug that more than doubled its sales from $275 million in 2023 to $612 million in 2024.

Apellis CEO Cedric Francois, M.D., Ph.D., expressed optimism about Empaveli's potential, citing "unprecedented" phase 3 results in C3G and IC-MPGN. The company believes the drug has blockbuster potential in these indications. The FDA is scheduled to decide on Empaveli for C3G and IC-MPGN on July 28, while Europe's Committee for Medicinal Products for Human Use (CHMP) is expected to reach a decision by the end of the year.

Industry Reaction and Analysis

The amended agreement has been well-received by industry analysts. Evercore praised the deal, noting that it addresses investor concerns about Apellis' cash balance without significantly impacting long-term value. Mizuho Securities analysts viewed the development as a net positive for Apellis, highlighting the non-dilutive funding it provides and its potential to strengthen the company's balance sheet.

Guido Oelkers, Sobi's CEO, expressed confidence in the company's ability to reach patients with C3G and IC-MPGN globally following regulatory approvals. He cited Sobi's broad commercial footprint, deep rare disease expertise, and proven success in PNH as key factors in this endeavor.

As the pharmaceutical industry continues to evolve, strategic partnerships and financial agreements like this one between Apellis and Sobi demonstrate the complex interplay between drug development, market potential, and financial considerations in bringing innovative treatments to patients with rare diseases.