A big quarterly earnings miss was the news driving down the value of Apellis Pharmaceuticals (APLS +0.07%) stock in the middle of the trading week. Investors didn't take this development well, and they collectively pushed down Apellis by almost 6%, on a day when the S&P 500 (^GSPC +1.20%) closed in the black with a 0.4% gain.
Lower revenue and deeper net loss
In its first quarter, Apellis booked revenue of $166.8 million, the bulk of which comprised slightly under $150 million in U.S. product sales. That total represented a decline of 3% year over year. Of the company's drugs, Syfovre was the top seller, bringing in revenue of over $130 million, while Empaveli was the runner-up with nearly $20 million.
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With higher costs during the quarter, Apellis's net loss deepened. It came in at over $92 million ($0.74 per share) under generally accepted accounting principles (GAAP) standards, against the $86 million in the same period last year.
The company was also negatively affected by outside factors. In its earnings release, it quoted CEO Cedric Francois as explaining that "revenue was impacted by funding shortages at third-party co-pay assistance programs and a larger-than-expected drawdown of total channel inventory, including physician offices."
Regardless, Apellis missed on both the top and bottom lines. Analysts were collectively modeling slightly under $198 million for total revenue, and a net loss of only $0.34 per share.
NASDAQ: APLS
Key Data Points
Possible new approval coming in the summer
It was certainly a quarter to forget for Apellis, but I don't feel investors should give up hope on the stock.
It continues to develop both Syfovre and Empaveli for new indications, saying in the earnings release that the latter is making good progress toward eventual Food and Drug Administration (FDA) approval for kidney disorders C3 glomerulopathy (C3G) and complex-mediated Membranoproliferative Glomerulonephritis (IC-MPGN). Apellis added that a decision from the regulator is expected in July.
