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Apellis Pharmaceuticals, Inc. (NASDAQ:APLS), a $2.18 billion market cap biotech company whose stock has declined 45.75% over the past six months, announced Monday that it has entered into a Royalty Buy-Down Agreement with Swedish Orphan Biovitrum AB (Sobi). According to InvestingPro analysis, the company appears undervalued at current levels, despite recent market challenges. According to a statement based on an SEC filing, Sobi will pay Apellis an upfront sum of $275 million within five business days of the closing. The agreement also provides for up to $25 million in additional payments if the European Medicines Agency approves Aspaveli for C3G and IC-MPGN. The deal comes as Apellis maintains a healthy liquidity position with a current ratio of 4.08, while operating with moderate debt levels.
In exchange, Apellis will reduce Sobi’s royalty payment obligations under their existing collaboration and license agreement by 90%, effective immediately. This reduction is subject to defined caps tied to Aspaveli’s performance, including an initial cap of 1.45 times the total amounts paid by Sobi under the new royalty agreement. After reaching this cap, Sobi’s royalty obligations will return to the original terms.
The lenders under Apellis’s financing agreement with Sixth Street Lending Partners have consented to the new royalty arrangement. As part of this consent, Apellis has agreed to extend by one year the periods in which certain prepayment premiums would apply to any prepayments made under its credit facility.
The details of the Royalty Buy-Down Agreement will be included as an exhibit to Apellis’s quarterly report for the period ending September 30, 2025. This information is based on a press release statement and the company’s SEC filing.
In other recent news, Apellis Pharmaceuticals has entered a royalty purchase agreement with Sobi, securing up to $300 million for 90% of its future ex-U.S. royalties for Aspaveli, with $275 million received upfront. This development comes as Apellis retains exclusive U.S. rights for systemic pegcetacoplan, marketed as EMPAVELI, which is under regulatory review for C3 glomerulopathy and IC-MPGN. Additionally, a Phase 3 study presented at the European Renal Association Congress demonstrated EMPAVELI’s efficacy in reducing proteinuria and stabilizing kidney function in patients with rare kidney diseases. Analysts have adjusted their outlooks on Apellis, with Wells Fargo (NYSE:WFC) raising the stock price target to $29, maintaining an Equal Weight rating, and Citi reducing the target to $41 while maintaining a Buy rating. Raymond (NSE:RYMD) James downgraded Apellis from ’Strong Buy’ to ’Outperform,’ adjusting the price target to $52 after first-quarter earnings for 2025 revealed net sales of Syfovre at $130.2 million, below expectations. Despite this, Apellis maintains a strong market share in geographic atrophy and anticipates potential product launches. The company is also planning pivotal studies for delayed graft function and focal segmental glomerulosclerosis later in 2025. These recent developments indicate ongoing strategic moves and research efforts by Apellis Pharmaceuticals.
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