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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38276

APELLIS PHARMACEUTICALS, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	27-1537290
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

100 Fifth Avenue, Waltham, MA	02451
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (617) 977-5700

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	APLS	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Small reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 24, 2025, the registrant had 126,289,910 shares of common stock, $0.0001 par value per share, outstanding.

APELLIS PHARMACEUTICALS, INC.

FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2025

TABLE OF CONTENTS


		Page
PART I.	FINANCIAL INFORMATION	3
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2025 and 2024	4
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2025 and 2024	5
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
PART II.	OTHER INFORMATION	35
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 5.	Other Information	35
Item 6.	Exhibits	36
Signatures		37

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Special Note Regarding Forward-Looking Statements and Industry Data

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management and expected market growth are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

These forward-looking statements include, among other things, statements about:

•

the ongoing commercialization of EMPAVELI and SYFOVRE;

•

our plans with respect to our ongoing and planned clinical trials for our product candidates, whether conducted by us or Swedish Orphan Biovitrum AB (Publ), or Sobi, or by any future collaborators, including the timing of initiation, dosing of patients, enrollment and completion of these trials and expectations regarding the anticipated results from these trials;

•

our sales, marketing and distribution capabilities and strategies, including for the commercialization and manufacturing of EMPAVELI, SYFOVRE and any future products for which we receive marketing approval;

•

the rate and degree of market acceptance of EMPAVELI, SYFOVRE and any future products for which we receive marketing approval;

•

our ability to identify and develop current and future products or product candidates with significant clinical benefits and commercial potential;

•

the timing of and our ability to obtain and maintain regulatory approvals for our product candidates for current and future treatment indications in the U.S. and other jurisdictions;

•

our current and any future collaborations for the development and commercialization of our current and future product candidates; including our collaborations with Sobi and Beam Therapeutics, Inc.;

•

our intellectual property position and strategy;

•

the sufficiency of our cash and cash equivalents and our expected revenues from sales of EMPAVELI and SYFOVRE to fund our projected operating expenses and capital expenditures to profitability;

•

our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

•

developments relating to our competitors and our industry; and

•

the impact of new government laws and regulations (including tax).

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, particularly in the “Risk Factors” section, that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments that we may make or enter into.

You should read this Quarterly Report on Form 10-Q and the documents that we have filed or incorporated by reference as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

This Quarterly Report on Form 10-Q includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. All of the market data used in this Quarterly Report on Form 10-Q involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such data. We believe that the information from these industry publications, surveys and studies is reliable. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of important factors, including those described in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us. The Apellis, EMPAVELI, SYFOVRE and Apellis

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Assist names and logos are our trademarks, trade names and service marks. The other trademarks, trade names and service marks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners.

Note regarding certain references in this Quarterly Report on Form 10-Q

Unless otherwise stated or the context indicates otherwise, all references herein to “Apellis,” “Apellis Pharmaceuticals, Inc.,” “we,” “us,” “our,” “our company,” “the Company” and similar references refer to Apellis Pharmaceuticals, Inc. and its wholly owned subsidiaries.

In addition, unless otherwise stated or the context indicates otherwise, all references in this Quarterly Report on Form 10-Q to “EMPAVELI (pegcetacoplan)” and “EMPAVELI” refer to systemic pegcetacoplan in the context of the commercially available product in the United States for the treatment of adults with paroxysmal nocturnal hemoglobinuria, or PNH, and C3 glomerulopathy (C3G) and primary immune complex membranoproliferative glomerulonephritis (IC-MPGN) in patients 12 years of age and older. References to Aspaveli refer to pegcetacoplan in the context of the commercially available product outside the United States for the treatment of adults with PNH who are anemic after treatment with a C5 inhibitor for at least three months, in each case, as more fully described herein. Unless otherwise stated or the context indicates otherwise, all references in this Quarterly Report on Form 10-Q to “SYFOVRE (pegcetacoplan injection)” and “SYFOVRE” refer to intravitreal pegcetacoplan in the context of the commercially available product for which we received approval from the United States Food and Drug Administration in February 2023 for the treatment of geographic atrophy secondary to age-related macular degeneration. Unless otherwise stated or the context indicates otherwise, all references herein to “pegcetacoplan” refer to pegcetacoplan in the context of the product candidate for which we are exploring further applications and indications, as more fully described herein. The other trademarks, trade names and service marks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

APELLIS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Amounts in thousands, except per share amounts)


	June 30,			December 31,
	2025			2024
Assets
Current assets:
Cash and cash equivalents	$	370,036		$	411,290
Accounts receivable, net		214,131			264,926
Inventory		121,000			81,404
Prepaid assets		29,171			18,368
Restricted cash		1,430			1,322
Other current assets		19,842			11,644
Total current assets		755,610			788,954
Non-current assets:
Right-of-use assets		14,637			16,083
Property and equipment, net		2,117			2,952
Long-term inventory		48,128			75,713
Other assets		898			1,349
Total assets	$	821,390		$	885,051
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	54,241		$	38,572
Accrued expenses		138,999			140,184
Current portion of lease liabilities		7,419			6,753
Total current liabilities		200,659			185,509
Long-term liabilities:
Long-term credit facility		360,535			359,489
Convertible senior notes		93,500			93,341
Lease liabilities		8,313			10,201
Other liabilities		2,078			7,972
Total liabilities		665,085			656,512
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 10,000 shares authorized, and no shares issued and outstanding at June 30, 2025 and December 31, 2024		—			—
Common stock, $0.0001 par value; 200,000 shares authorized at June 30, 2025 and December 31, 2024; 126,187 shares issued and outstanding at June 30, 2025, and 124,495 shares issued and outstanding at December 31, 2024		12			12
Additional paid-in capital		3,328,604			3,267,201
Accumulated other comprehensive loss		(2,569	)		(3,308	)
Accumulated deficit		(3,169,742	)		(3,035,366	)
Total stockholders’ equity		156,305			228,539
Total liabilities and stockholders’ equity	$	821,390		$	885,051

See accompanying notes to unaudited condensed consolidated financial statements.

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APELLIS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(Amounts in thousands, except per share amounts)


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2025			2024			2025			2024
Revenue:
Product revenue, net	$	171,387		$	179,136		$	321,287		$	342,211
Licensing and other revenue		7,107			20,549			24,004			29,798
Total revenue:		178,494			199,685			345,291			372,009
Operating expenses:
Cost of sales		13,626			23,100			47,986			43,309
Research and development		67,015			77,947			153,435			162,647
Selling, general and administrative		131,139			128,081			260,484			257,587
Total operating expenses:		211,780			229,128			461,905			463,543
Net operating loss		(33,286	)		(29,443	)		(116,614	)		(91,534	)
Loss on extinguishment of development liability		—			(1,949	)		—			(1,949	)
Interest income		2,607			3,184			5,265			6,488
Interest expense		(11,152	)		(9,359	)		(22,201	)		(16,326	)
Other income/(expense), net		146			24			(19	)		(475	)
Net loss before taxes		(41,685	)		(37,543	)		(133,569	)		(103,796	)
Income tax expense		466			114			807			284
Net loss	$	(42,151	)	$	(37,657	)	$	(134,376	)	$	(104,080	)
Other comprehensive gain:
Foreign currency translation		485			163			739			180
Total other comprehensive income		485			163			739			180
Comprehensive loss, net of tax	$	(41,666	)	$	(37,494	)	$	(133,637	)	$	(103,900	)
Net loss per common share, basic and diluted	$	(0.33	)	$	(0.30	)	$	(1.07	)	$	(0.84	)
Weighted-average number of common shares used in net loss per common share, basic and diluted		126,024			123,904			125,740			123,430

See accompanying notes to unaudited condensed consolidated financial statements.

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Apellis Pharmaceuticals, Inc.

CONDENSED Consolidated Statements of CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

(Amounts in thousands)


									Accumulated
	Common Stock					Additional			Other						Total
	Outstanding					Paid-In			Comprehensive			Accumulated			Stockholders’
	Shares		Amount			Capital			Loss			Deficit			Equity
Balance at January 1, 2025		124,495		$	12	$	3,267,201		$	(3,308	)	$	(3,035,366	)	$	228,539
Issuance of common stock upon exercise of stock options		15			—		281			—			—			281
Vesting of restricted stock units, net of shares withheld for taxes		1,151			—		(7	)		—			—			(7	)
Share-based compensation expense		—			—		27,374			—			—			27,374
Net loss		—			—		—			—			(92,225	)		(92,225	)
Foreign currency translation		—			—		—			254			—			254
Balance at March 31, 2025		125,661		$	12	$	3,294,849		$	(3,054	)	$	(3,127,591	)	$	164,216
Issuance of common stock upon exercise of stock options		310			—		4,367			—			—			4,367
Vesting of restricted stock units, net of shares withheld for taxes		82			—		—			—			—			—
Share-based compensation expense		—			—		27,197			—			—			27,197
Issuance of common stock under employee stock purchase plan		134			—		2,191			—			—			2,191
Net loss		—			—		—			—			(42,151	)		(42,151	)
Foreign currency translation		—			—		—			485						485
Balance at June 30, 2025		126,187		$	12	$	3,328,604		$	(2,569	)	$	(3,169,742	)	$	156,305

See accompanying notes to unaudited condensed consolidated financial statements.

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Apellis Pharmaceuticals, Inc.

CONDENSED Consolidated Statements of CHANGES IN STOCKHOLDERS’ EQUITY

(Continued from previous page)

(Unaudited)

(Amounts in thousands)


									Accumulated
	Common Stock					Additional			Other						Total
	Outstanding					Paid-In			Comprehensive			Accumulated			Stockholders’
	Shares		Amount			Capital			Loss			Deficit			Equity
Balance at January 1, 2024		119,556		$	12	$	3,035,539		$	(3,542	)	$	(2,837,488	)	$	194,521
Proceeds from settlement of capped call		—			—		98,763			—			—			98,763
Issuance of common stock upon exercise of stock options		714			—		9,477			—			—			9,477
Vesting of restricted stock units, net of shares withheld for taxes		997			—		(28	)		—			—			(28	)
Share-based compensation expense		—			—		30,349			—			—			30,349
Net loss		—			—		—			—			(66,423	)		(66,423	)
Foreign currency translation		—			—		—			17			—			17
Balance at March 31, 2024		121,267		$	12	$	3,174,100		$	(3,525	)	$	(2,903,911	)	$	266,676
Issuance of common stock upon exercise of stock options		233			—		1,962			—			—			1,962
Vesting of restricted stock units, net of shares withheld for taxes		102			—		—			—			—			—
Share-based compensation expense		—			—		29,990			—			—			29,990
Issuance of common stock under employee stock purchase plan		85			—		3,193			—			—			3,193
Net loss		—			—		—			—			(37,657	)		(37,657	)
Foreign currency translation		—			—		—			163			—			163
Balance at June 30, 2024		121,687		$	12	$	3,209,245		$	(3,362	)	$	(2,941,568	)	$	264,327

See accompanying notes to unaudited condensed consolidated financial statements.

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Apellis Pharmaceuticals, Inc.

CONDENSED Consolidated Statements of Cash Flows

(Unaudited)

(Amounts in thousands)


	For the Six Months Ended June 30,
	2025			2024
Operating Activities
Net loss	$	(134,376	)	$	(104,080	)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense		54,571			60,339
Loss on extinguishment of development liability		—			1,949
Depreciation expense		892			893
Amortization of discounts for credit facility		1,046			161
Amortization of discounts for convertible notes		159			153
Accretion of discount to development liability		—			8,936
Changes in operating assets and liabilities:
Accounts receivable		50,798			(97,990	)
Inventory		(12,011	)		(29,431	)
Prepaid assets		(10,773	)		9,832
Other current assets		(8,145	)		10,039
Other assets		259			(306	)
Right-of-use assets and lease liabilities		222			(171	)
Accounts payable		15,666			759
Accrued expenses		(7,273	)		(4,308	)
Deferred revenue		—			1,903
Net cash used in operating activities		(48,965	)		(141,322	)
Investing Activities
Purchase of property and equipment		(57	)		(383	)
Net cash used in investing activities		(57	)		(383	)
Financing Activities
Proceeds from credit facility		—			365,454
Payment of issuance cost for credit facility		—			(1,589	)
Repayment of development liability		—			(326,533	)
Proceeds from settlement of capped call		—			98,763
Proceeds from exercise of stock options		4,648			11,439
Proceeds from issuance of common stock under employee stock purchase plan		2,191			3,193
Payments of employee tax withholding related to equity-based compensation		(7	)		(28	)
Net cash provided by financing activities		6,832			150,699
Effect of exchange rate changes on cash, cash equivalents and restricted cash		1,044			133
Net (decrease)/ increase in cash, cash equivalents and restricted cash		(41,146	)		9,127
Cash, cash equivalents and restricted cash at beginning of period		412,612			352,299
Cash, cash equivalents and restricted cash at end of period	$	371,466		$	361,426
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets:
Cash and cash equivalents	$	370,036		$	360,087
Restricted cash		1,430			1,339
Total cash, cash equivalents, and restricted cash	$	371,466		$	361,426
Supplemental Disclosures
Cash paid for interest	$	11,092		$	6,949
Cash paid for income taxes	$	807		$	—
Proceeds from income tax refunds net of income taxes paid	$	—		$	119

See accompanying notes to unaudited condensed consolidated financial statements.

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APELLIS PHARMACEUTICALS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Nature of Organization and Operations

Apellis Pharmaceuticals, Inc. (the “Company”) is a commercial-stage biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutic compounds to treat diseases with high unmet needs through the inhibition of the complement system, which is an integral component of the immune system, at the level of C3, the central protein in the complement cascade.

The Company was incorporated in September 2009 under the laws of the State of Delaware. The Company’s principal executive offices are located in Waltham, Massachusetts.

The Company’s operations since inception have included organizing and staffing the Company, acquiring rights to product candidates, business planning, raising capital, developing its product candidates, commercializing EMPAVELI (pegcetacoplan) for the treatment of paroxysmal nocturnal hemoglobinuria (“PNH”), C3 glomerulopathy (“C3G”) and primary immune complex membranoproliferative glomerulonephritis (“IC-MPGN”), and commercializing SYFOVRE (pegcetacoplan injection) for the treatment of geographic atrophy secondary to age-related macular degeneration (“GA”).

The Company is subject to risks common in the biotechnology industry including, but not limited to, raising additional capital, development by its competitors of new technological innovations, its ability to successfully complete preclinical and clinical development of product candidates and receive timely regulatory approval of products, market acceptance of the Company’s products, protection of proprietary technology, healthcare cost containment initiatives, and compliance with governmental regulations, including those of the U.S. Food and Drug Administration (“FDA”).

Liquidity and Going Concern

The accompanying unaudited condensed consolidated financial statements have been prepared on the basis of the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. From inception to June 30, 2025, the Company has incurred cash outflows from operations, losses from operations and had an accumulated deficit of $3.2 billion primarily as a result of expenses incurred through a combination of research and development activities related to the Company’s various product candidates and expenses supporting those activities and expenses incurred in connection with product launches and commercialization costs.

As of July 31, 2025, the date of issuance of these unaudited condensed consolidated financial statements, the Company believes that its cash and cash equivalents of $370.0 million as of June 30, 2025 and recent proceeds received from the Sobi Royalty Buy-Down Agreement of $275.0 million (further described in Note 14), combined with cash anticipated to be generated from sales of EMPAVELI and from SYFOVRE, will be sufficient to fund its operations and capital expenditure requirements for at least twelve months from the date of issuance of these condensed consolidated financial statements.

2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and following the requirements of the Securities and Exchange Commission (the “SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP have been condensed or omitted and, accordingly, the condensed consolidated balance sheet as of December 31, 2024 has been derived from audited consolidated financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements. These financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of the Company’s financial information. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any other interim period or for any other future year.

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The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2025 (the “2024 Form 10-K”).

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: accrued research and development expenses, reserves for variable consideration, share-based compensation expense and reserves for excess or obsolete inventories.

Summary of Significant Accounting Policies

Reference is made to Note 2 Summary of Significant Accounting Policies in our 2024 Form 10-K for a detailed description of significant accounting policies. There have been no significant changes to our accounting policies as disclosed in our 2024 Form 10-K.

Recent Accounting Pronouncements issued not yet adopted

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, and subsequent amendments with ASU 2025-01, which requires additional disclosure of the nature of expenses included in the income statement. The standard requires disclosures about specific types of expenses included in the expense captions presented in the income. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The requirements should be applied on a prospective basis while retrospective application is permitted. We are currently evaluating the impact that the adoption of this guidance will have on our disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. This standard is an amendment to the accounting guidance on income taxes which requires entities to provide additional information in the rate reconciliation and additional disaggregated disclosures about income taxes paid. This guidance requires public entities to disclose in their rate reconciliation table additional categories of information about federal, state, and foreign income taxes and to provide more details about the reconciling items in some categories if the items meet a quantitative threshold. The guidance is effective for annual periods beginning after December 15, 2024. We are currently evaluating the impact that the adoption of this guidance will have on our disclosures.

3. Product Revenues, Accounts Receivable, and Reserves for Product Sales

The Company’s product revenues recorded in the United States, net of sales discounts, allowances and reserves, for the three months ended June 30, 2025 and 2024 were $171.4 million and $179.1 million, respectively. The Company’s product revenues consist of sales of EMPAVELI and SYFOVRE to specialty pharmacies and specialty distributors.

The Company’s product revenues recorded in the United States, net of sales discounts, allowances and reserves, for the six months ended June 30, 2025 and 2024 were $321.3 million and $342.2 million, respectively. The Company’s product revenues consist of sales of EMPAVELI and SYFOVRE to specialty pharmacies and specialty distributors.

The table reflects product revenue by major source for the following periods (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Products:
EMPAVELI	$	20,762	$	24,512	$	40,488	$	50,122
SYFOVRE		150,625		154,624		280,799		292,089
Total Product revenue, net	$	171,387	$	179,136	$	321,287	$	342,211

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The Company’s accounts receivable balance of $214.1 million as of June 30, 2025 and $264.9 million as of December 31, 2024, consisted of EMPAVELI and SYFOVRE product sales receivable. The Company does not have a reserve related to expected credit losses against its accounts receivable balance and expects to collect its accounts receivable in the ordinary course of business.

The Company’s product sales reserves totaled $44.5 million and $45.1 million as of June 30, 2025 and December 31, 2024, respectively. These amounts are included in accrued expenses on the Company’s unaudited condensed consolidated balance sheets.

The following table summarizes activity in each of the product revenue allowance and reserve categories for the three and six months ended June 30, 2025 (in thousands):


	Fees and patient assistance			Government and other rebates			Returns			Total
Ending balance at December 31, 2024	$	11,589		$	31,533		$	2,023		$	45,145
Provision related to sales in the current period		10,277			24,139			976			35,392
Adjustments related to prior period sales		439			(13	)		(382	)		44
Credits and payments made		(13,084	)		(28,467	)		(126	)		(41,677	)
Ending balance at March 31, 2025	$	9,221		$	27,192		$	2,491		$	38,904
Provision related to sales in the current period		12,138			30,823			1,083			44,044
Adjustments related to prior period sales		(66	)		185			852			971
Credits and payments made		(10,833	)		(27,623	)		(941	)		(39,397	)
Ending balance at June 30, 2025	$	10,460		$	30,577		$	3,485		$	44,522

The following table summarizes activity in each of the product revenue allowance and reserve categories for the three and six months ended June 30, 2024 (in thousands):


	Fees and patient assistance			Government and other rebates			Returns			Total
Ending balance at December 31, 2023	$	5,674		$	8,898		$	2,053		$	16,625
Provision related to sales in the current period		9,575			13,125			1,355			24,055
Adjustments related to prior period sales		146			(19	)		(96	)		31
Credits and payments made		(9,724	)		(9,906	)		(1,859	)		(21,489	)
Ending balance at March 31, 2024	$	5,671		$	12,098		$	1,453		$	19,222
Provision related to sales in the current period		10,025			17,777			1,039			28,841
Adjustments related to prior period sales		(131	)		354			(983	)		(760	)
Credits and payments made		(9,635	)		(14,640	)		(326	)		(24,601	)
Ending balance at June 30, 2024	$	5,930		$	15,589		$	1,183		$	22,702

Significant customers - Gross product revenues and product sales receivable from the Company's customers who individually accounted for 10% or more of total gross product revenues and/or 10% or more of total product sales receivable consisted of the following:


	Percent of Total Gross Product Revenues
	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
Customer A	11%	13%	11%	14%
Customer C	17%	19%	18%	19%
Customer D	62%	58%	60%	58%


	Percent of Product Sales Receivable
	As of June 30,
	2025	2024
Customer A	3%	2%
Customer C	28%	20%
Customer D	54%	67%

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Factoring of accounts receivable and associated fees for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):


	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2025			2024		2025			2024
Accounts receivable sold	$	99,712		$	—	$	199,448		$	—
Less: factoring fees		(1,222	)		—		(2,433	)		—
Net cash proceeds	$	98,490		$	—	$	197,015		$	—

Accounts receivable sold that remained outstanding as of June 30, 2025 and December 31, 2024 totaled $99.7 million and $86.1 million, respectively.

4. Inventory

The Company’s inventory consisted of the following as of June 30, 2025 and December 31, 2024 (in thousands):


	June 30,		December 31,
	2025		2024
Raw materials	$	56,431	$	54,385
Semi-finished goods		101,181		92,872
Finished goods		11,516		9,860
Total inventory	$	169,128	$	157,117

The Company's long-term inventory balance consists of raw materials as of June 30, 2025, and raw materials and semi-finished goods as of December 31, 2024, that are not expected to be sold within the Company's normal operating cycle.

Inventory amounts written down as a result of excess, obsolescence, unmarketability or other reasons are charged to cost of sales. The Company's reserve for excess and obsolete inventory was $20.4 million and $19.0 million as of June 30, 2025 and December 31, 2024, respectively.

5. Prepaid and Other Current Assets

Prepaid and other current assets consisted of the following as of June 30, 2025 and December 31, 2024 (in thousands):


	June 30,		December 31,
	2025		2024
Down payments for inventory	$	237	$	1,080
Prepaid research and development		15,465		7,780
Other prepaid expenses		13,469		9,508
Total prepaid assets	$	29,171	$	18,368


	June 30,		December 31,
	2025		2024
Royalties receivable	$	5,922	$	4,525
Receivable from collaboration agreement		9,174		2,272
Deposits and other current assets		4,746		4,847
Total other current assets	$	19,842	$	11,644

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6. Accrued Expenses

Accrued expenses consisted of the following as of June 30, 2025 and December 31, 2024 (in thousands):


	June 30,		December 31,
	2025		2024
Accrued research and development	$	30,434	$	22,782
Accrued royalties		6,774		7,147
Accrued payroll liabilities		26,469		40,888
Accrued goods received not invoiced		5,271		638
Product revenue reserves		44,522		45,145
Commercial costs		19,981		20,610
Other		5,548		2,974
Total accrued expenses	$	138,999	$	140,184

7. Long-term Debt

Convertible Senior Notes

On September 16, 2019, the Company completed a private offering of convertible notes (the “2019 Convertible Notes”) with an aggregate principal amount of $220.0 million issued pursuant to an indenture (the “Indenture”) with U.S. Bank National Association, as trustee.

The net proceeds from the sale of the 2019 Convertible Notes were approximately $212.9 million after deducting the initial purchasers’ discounts and commissions of $6.6 million and offering expenses of $0.5 million paid by the Company. The Company used $28.4 million of the net proceeds from the sale of the 2019 Convertible Notes to pay the cost of the capped call transactions in September 2019 described below.

On May 12, 2020, the Company issued convertible notes (the “2020 Convertible Notes”) with an aggregate principal amount of $300.0 million. The net proceeds from the sale of the 2020 Convertible Notes were approximately $322.9 million after deducting the purchasers’ discounts and commission of $5.7 million and offering expenses of $0.3 million. The Company used $43.1 million of the net proceeds from the sale of the 2020 Convertible Notes to pay the cost of the additional capped call transactions in May 2020 described below.

The 2019 Convertible Notes and the 2020 Convertible Notes are referred to together as the "Convertible Notes". The Convertible Notes are senior unsecured obligations of the Company and bear interest at a rate of 3.5% per year payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2020. The Convertible Notes will mature on September 15, 2026, unless converted earlier, redeemed or repurchased in accordance with their terms.

The Convertible Notes are convertible into shares of the Company’s common stock at an initial conversion rate of 25.3405 shares per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $39.4625 per share of common stock). The conversion rate is subject to customary anti-dilution adjustments. In addition, following certain events that occur prior to the maturity date or if the Company delivers a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its Convertible Notes in connection with such corporate event or a notice of redemption, as the case may be, in certain circumstances as provided in the Indenture.

Prior to March 15, 2026, the Convertible Notes are convertible only under the following circumstances:

•

during any calendar quarter, if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

•

during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the Convertible Notes for each such trading day was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day;

•

if the Company calls any or all of the Convertible Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or

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•

upon the occurrence of corporate events specified in the Indenture.

On or after March 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date of the Convertible Notes, holders may convert the Convertible Notes at any time. Upon conversion of the Convertible Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of common stock, at the Company’s election.

After September 20, 2023, the Company may redeem for cash all or a portion of the Convertible Notes, at its option, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides a notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price will be equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If the Company calls any Convertible Notes for redemption, it will constitute a “make-whole fundamental change” with respect to such Convertible Notes, in which case the conversion rate applicable to the conversion of such Notes, if converted in connection with the redemption, will be increased in certain circumstances. The Company has not called for redemption or redeemed any of the Convertible Notes as of June 30, 2025.

If the Company undergoes a “fundamental change,” as defined in the Indenture, prior to maturity, subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

In January 2021, July 2021 and July 2022, the Company entered into separate, privately negotiated exchange agreements to modify the conversion terms with certain holders of its 2019 Convertible Notes and 2020 Convertible Notes. Under the terms of these exchange agreements, in January 2021, July 2021 and July 2022, the holders exchanged approximately $126.1 million of 2019 Convertible Notes, $201.1 million of 2019 Convertible Notes and 2020 Convertible Notes, and $98.1 million of 2020 Convertible Notes, respectively, in aggregate principal amount held by them for an aggregate of 3,906,869 shares, 5,992,217 shares and 3,027,018 shares, respectively, of common stock issued by the Company. The Company accounted for the conversion of the debt as an inducement by expensing the fair value of the shares that were issued in excess of the original terms of the Convertible Notes.

The conditional conversion feature of the Convertible Notes was not triggered as of June 30, 2025 and as of December 31, 2024.

As of June 30, 2025, the Company held in treasury Convertible Notes in principal amount of $425.4 million which have not been cancelled.

The outstanding balance of the Convertible Notes as of June 30, 2025 and December 31, 2024 consisted of the following (in thousands):


	June 30,			December 31,
	2025			2024
Principal	$	93,897		$	93,897
Less: debt discount and issuance costs, net		(397	)		(556	)
Net carrying amount	$	93,500		$	93,341

The following table sets forth total interest expense recognized related to the Convertible Notes during the three and six months ended June 30, 2025 and 2024 (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024			2025		2024
Amortization of debt issuance costs	$	80	$	77		$	159	$	153
Contractual interest expense		822		822			1,643		1,643
Total interest expense	$	902	$	899		$	1,802	$	1,796

Capped Call Transactions

On September 11, 2019 and May 6, 2020, concurrently with the pricing of the 2019 Convertible Notes and the 2020 Convertible Notes, respectively, the Company entered into capped call transactions with two counterparties. The capped call transactions are

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expected generally to reduce the potential dilution to the Company’s common stock upon any conversion of Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Convertible Notes, as the case may be, in the event that the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, is greater than the strike price of the capped call transactions, which is initially $39.4625 (the conversion price of the Convertible Notes) and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of such Convertible Notes. If, however, the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, exceeds the cap price of the capped call transactions, which is initially $63.14 per share, there would nevertheless be dilution and/or there would not be an offset of such potential cash payments, in each case, to the extent that such market price exceeds the cap price of the capped call transactions.

On February 27, 2024, the Company unwound a portion of the capped call transactions with the capped call counterparties, which resulted in cash proceeds to the Company of $98.8 million. The unwind transactions were settled at a volume-weighted average price per share of $64.11 on March 8, 2024.

As of June 30, 2025, the Company holds remaining capped call transactions in a notional amount corresponding to $93.9 million principal amount of Convertible Notes.

Financing Agreement and Credit Facility

On May 13, 2024, the Company and certain of its subsidiaries entered into a financing agreement (the “Sixth Street Financing Agreement”) with the lenders party thereto (the “Lenders”), and Sixth Street Lending Partners (“Sixth Street”), as the administrative agent and collateral agent for the Lenders.

The Sixth Street Financing Agreement provides for a senior secured term loan facility of up to $475.0 million (the “Credit Facility”), consisting of an initial draw of $375.0 million at closing and a potential additional $100.0 million draw at the Company’s option upon satisfaction of a $50.0 million minimum cash requirement and a requirement that the Company’s trailing three-month sales of SYFOVRE is at least $180.0 million prior to the $100.0 million draw. The Company can exercise the option for the $100.0 million draw through September 30, 2025, assuming such requirements are met.

The Credit Facility matures on May 13, 2030 (the “Maturity Date”) and bears interest at an annual rate equal to 3-month Secured Overnight Financing Rate ("SOFR") (subject to 1.00% floor), plus 5.75%. Certain additional commitment and undrawn amount fees are also payable in connection with the Credit Facility.

The net proceeds from the initial draw of the Credit Facility were approximately $358.2 million, net of $16.8 million of issuance costs. The Company used $326.5 million of the proceeds from the initial draw of the Credit Facility to buy out its remaining obligations to SFJ Pharmaceuticals Group ("SFJ").

The Credit Facility does not provide for scheduled amortization payments during the term. All principal will be due on the Maturity Date. The Company has the right to prepay loans under the Credit Facility at any time. The Company is required to repay loans under the Credit Facility with proceeds from certain asset sales, condemnation events and extraordinary receipts, subject, in some cases, to reinvestment rights. Repayments are subject to a prepayment premium. Repayments may be made after the first year of the loan and are subject to a prepayment premium up to 3% depending on timing.

On July 1, 2025, the lenders under the Sixth Street Financing Agreement with Sixth Street and the guarantors and lenders party thereto, have consented to the Royalty Agreement as further described in Note 14, and, in connection with that consent, the Company has agreed to extend by one year from the closing date of the Royalty Agreement, the periods in which certain prepayment premiums would be owing upon any applicable prepayments of the indebtedness under the Credit Facility provided for under the Sixth Street Financing Agreement.

All obligations under the Sixth Street Financing Agreement are secured on a first-priority basis, subject to certain exceptions, by security interests in substantially all assets of the Company and certain subsidiaries of the Company, including its intellectual property, and are guaranteed by certain subsidiaries of the Company, including foreign subsidiaries, subject to certain exceptions.

The Sixth Street Financing Agreement contains customary covenants, including, without limitation, a financial covenant to maintain liquidity of at least $50.0 million if the Company’s market capitalization is below $3.0 billion, and negative covenants that, subject to certain exceptions, restrict indebtedness, liens, investments (including acquisitions), fundamental changes, asset sales and licensing transactions, dividends, modifications to material agreements, payment of subordinated indebtedness, and other matters customarily restricted in such agreements. Among other permissions, the Company is permitted, on terms and conditions set forth on the Sixth Street Financing Agreement, to enter into a separate asset-based financing arrangement with a third party in an amount of up to $100.0 million, which amount is increased to $200.0 million upon certain sales or market capitalization thresholds, and to have outstanding convertible unsecured notes in an amount equal to the greater of $400.0 million and 10% of the Company’s market

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capitalization, but not to exceed $600.0 million. The Company is subject to restrictions on sales and licensing transactions with respect to its core intellectual property, defined to include SYFOVRE, EMPAVELI, and other pegcetacoplan product assets, subject to certain exceptions, including certain transactions related to areas outside the United States and Europe.

The outstanding balance of the Credit Facility as of June 30, 2025 and December 31, 2024 consisted of the following (in thousands):


	June 30,			December 31,
	2025			2024
Principal	$	375,000		$	375,000
Less: debt discount and issuance costs		(14,465	)		(15,511	)
Net carrying amount	$	360,535		$	359,489

The following table sets forth total interest expense recognized related to the Credit Facility during the three and six months ended June 30, 2025 and 2024 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024			2025		2024
Amortization of debt issuance costs	$	534	$	161		$	1,046	$	161
Contractual interest expense		9,526		5,306			18,975		5,306
Total interest expense	$	10,060	$	5,467		$	20,021	$	5,467

8. Fair Value Measurements

The following table presents the fair value of financial instruments recorded originally at amortized cost or fair value and not remeasured on a recurring basis (in thousands):


		June 30, 2025
Balance Sheet Classification	Type of Instrument	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents:	Money market funds	$	175,646	$	—	$	—	$	175,646
Total Financial Assets		$	175,646	$	—	$	—	$	175,646

		December 31, 2024
Balance Sheet Classification	Type of Instrument	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	Money market funds	$	276,868	$	—	$	—	$	276,868
Total Financial Assets		$	276,868	$	—	$	—	$	276,868

The Company’s Convertible Notes are financial instruments that are reported in the condensed consolidated financial statements at historical cost. The Convertible Notes are Level 1 within the fair value level hierarchy as of June 30, 2025 and December 31, 2024. The fair value of the Convertible Notes was $93.7 million as of June 30, 2025 and $102.3 million as of December 31, 2024. The Convertible Notes accrue a semi-annual coupon at an annual rate of 3.5%, which was included in accrued expenses in the consolidated balance sheets as of June 30, 2025 and December 31, 2024.

The Company believes that the carrying amounts of remaining financial assets and liabilities, which include other current assets, accounts payable, and accrued expenses, approximates their fair values due to their short-term nature.

9. Income Taxes

The income tax provision during interim periods is computed by applying an estimated annual effective tax rate to year-to-date pre-tax income, plus adjustments for significant unusual or infrequently occurring items, in accordance with FASB ASC Topic 740-270, Income Taxes – Interim Reporting. The income tax provision differs from the U.S. federal statutory rate of 21% primarily due to the effect of valuation allowance against the Company’s net deferred tax assets, which reduces the Company’s net tax benefit.

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Deferred tax assets and deferred tax liabilities are determined based on temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is recorded against deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company has recorded a full valuation allowance against its net deferred tax assets as of June 30, 2025 and December 31, 2024.

The Company does not recognize a tax benefit for uncertain tax positions unless it is more likely than not that the position will be sustained upon examination by tax authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit that is recorded for these positions is measured at the largest amount of cumulative benefit that has greater than a 50 percent likelihood of being realized upon ultimate settlement. Deferred tax assets that do not meet these recognition criteria are not recorded and the Company recognizes a liability for uncertain tax positions that may result in tax payments. The Company has not recorded any amounts for unrecognized tax positions for the period ended June 30, 2025. Our policy is to review and update unrecognized tax positions as facts and circumstances change.

On July 4, 2025, The One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant tax provisions, such as permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently assessing its impact on our consolidated financial statements.

The Company recorded $0.5 million and $0.8 million of income tax expense for the three and six months ended June 30, 2025, and $0.1 million and $0.3 million of income tax expense for the three and six months ended June 30, 2024, respectively. The provision for income taxes consists of current tax expense, which relates primarily to the Company’s state and foreign tax jurisdictions.

10. License and Collaboration Agreements

Sobi License and Collaboration Agreement

In October 2020, the Company and its subsidiaries, Apellis International GmbH (f/k/a Apellis Switzerland GmbH) and APL DEL Holdings, LLC, entered into a Collaboration and License Agreement (the “Sobi collaboration agreement”) with Sobi, concerning the development and commercialization of pegcetacoplan and specified other structurally and functionally similar compstatin analogues or derivatives for use systemically or for local non-ophthalmological administration (collectively referred to as the “Licensed Products”).

Under the Sobi collaboration agreement, the Company granted Sobi an exclusive (subject to certain retained rights of the Company), sublicensable license of certain patent rights and know-how to develop and commercialize Licensed Products in all countries outside of the United States.

The Company retains the right to commercialize Licensed Products in the United States, and, subject to specified limitations, to develop Licensed Products worldwide for commercialization in the United States.

Under the Sobi collaboration agreement, the Company and Sobi agreed to collaborate to develop Licensed Products for certain indications, including PNH, C3G, IC-MPGN and HSCT-TMA (collectively the “Initial Indications”), and any other indications subsequently agreed upon by the parties, for commercialization by or on behalf of the Company in the United States and by or on behalf of Sobi outside of the United States. If the parties do not agree to jointly pursue any development activities for the Licensed Products (whether for an Initial Indication or otherwise), the party proposing to pursue such activities may conduct such activities at its sole expense (with the non-proposing party having the right to obtain rights to the data generated by such development activities by paying a specified percentage of that expense), subject to agreed-upon exceptions that limit each party’s unilateral development rights. In July 2025, the Company and Sobi have decided to discontinue development of systemic pegcetacoplan for Transplant-associated Thrombotic Microangiopathy (TA-TMA) (inclusive of HSCT-TMA) following completion of the Phase 2 study and a strategic assessment of the TA-TMA market landscape.

The initial development plan sets forth the initial development activities to be conducted by each of the Company and Sobi, with the Company bearing all costs incurred in conducting the activities set forth in such initial development plan, as well as certain specified additional costs that are not included in the initial development plan that may be incurred by the parties in developing Licensed Products for PNH in the European Union and the United Kingdom. The Company and Sobi formed several governance committees to oversee the development and manufacture, and to review and discuss the commercialization, of Licensed Products.

The Company shall supply Licensed Products to Sobi for development and for commercialization outside of the United States in accordance with a supply agreement between the parties. The Sobi collaboration agreement grants Sobi the right to perform or have performed drug product manufacturing of Licensed Products for development and for commercialization outside the United States and

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to manufacture or have manufactured drug substance under certain circumstances. For the three and six months ended June 30, 2025 the Company recognized revenues of $1.2 million and $12.0 million, respectively, for the supply of Licensed Products to Sobi, which is included in Licensing and other revenue on the condensed consolidated statements of operations and comprehensive loss. For the three and six months ended June 30, 2024 the Company recognized revenues of $16.1 million and $20.9 million, respectively, for the supply of Licensed Products to Sobi, which is included in Licensing and other revenue on the condensed consolidated statements of operations and comprehensive loss.

Sobi paid the Company an upfront payment of $250.0 million in November 2020 and has agreed to pay up to an aggregate of $915.0 million upon the achievement of specified one-time regulatory and commercial milestone events, of which the Company received $50.0 million in April 2022 for the achievement of a regulatory development milestone in Europe. Sobi also agreed to reimburse the Company for up to $80.0 million in development costs, of which the Company received $65.0 million and waived payment of $15.0 million. The Company will also be entitled to receive tiered, double-digit royalties (ranging from high teens to high twenties) on sales of Licensed Products outside of the United States, subject to customary deductions and third-party payment obligations, until the latest to occur of: (i) expiration of the last-to-expire of specified licensed patent rights; (ii) expiration of regulatory exclusivity; and (iii) ten (10) years after the first commercial sale of the applicable Licensed Product, in each case on a Licensed Product-by-Licensed Product and country-by-country basis. Under the Sobi collaboration agreement, the Company remains responsible for its license fee obligations (including royalty obligations) to the Trustees of the University of Pennsylvania (“Penn”), as a licensor of the Company.

Under the Sobi collaboration agreement, for the three and six months ended June 30, 2025, the Company recognized $5.9 million and $12.0 million, respectively, of royalty revenue from sales of Aspaveli, which was sold by Sobi outside of the United States. For the three and six months ended June 30, 2024, the Company recognized $4.4 million and $8.9 million, respectively, of royalty revenue from sales of Aspaveli, which was sold by Sobi outside of the United States.

The Company did not recognize any contra-research and development expense for the three and six months ended June 30, 2025 and 2024. The Company doesn't expect to recognize the additional contra-research and development expense under this agreement.

University of Pennsylvania License Agreements

Patent License Agreement with Penn (Non-ophthalmic Fields of Use)

The Company is party to a license agreement with Penn for an exclusive, worldwide license to specified patent rights for the development and commercialization of products in fields of use, as defined therein. The Company is required to make milestone payments aggregating up to $1.7 million, based upon the achievement of development and regulatory approval milestones, and up to $2.5 million, based upon the achievement of annual sales milestones with respect to each of the first two licensed products. The license agreement also requires the Company to pay low single digit royalties based on net sales of each licensed product, subject to minimum quarterly royalty thresholds. In addition, the Company is obligated to pay a specified portion of income it receives from sublicensees.

In January 2021, the Company paid $25.0 million for a sublicense fee owed to Penn related to the Sobi collaboration agreement and another licensing transaction. In August 2021, the Company paid $1.0 million to Penn upon the achievement of a development milestone, net of a credit for the annual license maintenance payment. In June 2022, the Company paid an additional $5.0 million to Penn for a sublicense fee related to the Sobi collaboration agreement. In January 2023, the Company paid $1.0 million to Penn upon the achievement of a sales milestone for EMPAVELI in 2022. In January 2024, the Company paid $0.5 million for a sublicense fee owed to Penn related to Sobi obtaining regulatory approval in Japan. Additionally, in January 2024, the Company paid $1.5 million as a result of the achievement of a sales milestone for EMPAVELI and Aspaveli.

For the three and six months ended June 30, 2025, the Company incurred royalty expense of $1.7 million and $3.3 million, respectively, on sales of EMPAVELI and Aspaveli which is included in cost of sales on the condensed consolidated statements of operations and comprehensive loss.

For the three and six months ended June 30, 2024, the Company incurred royalty expense of $1.6 million and $3.1 million, respectively, on sales of EMPAVELI and Aspaveli which is included in cost of sales on the condensed consolidated statements of operations and comprehensive loss.

Amended and Restated Patent License Agreement with Penn (Ophthalmic Field of Use)

The Company is also party to a license agreement with Penn for an exclusive, worldwide license to specified patent rights. The Company is required to make milestone payments aggregating up to $3.2 million based upon the achievement of specified development and regulatory milestones and up to $5.0 million based upon the achievement of specified annual sales milestones with respect to each licensed product, and to pay low single-digit royalties based on net sales of each licensed product and with minimum quarterly royalty thresholds. In addition, the Company is obligated to pay a specified portion of income it receives from sublicensees.

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In April 2023, the Company paid $2.3 million for the achievement of a regulatory milestone as a result of the FDA approval of SYFOVRE in February 2023. In 2023, the Company incurred $5.0 million as a result of the achievement of sales milestones for SYFOVRE of which the Company paid $2.0 million in October 2023 and the remaining $3.0 million in January 2024.

For the three and six months ended June 30, 2025, the Company incurred royalty expense of $4.9 million and $9.2 million, respectively, on sales of SYFOVRE, which is included in cost of sales on the condensed consolidated statements of operations and comprehensive loss.

For the three and six months ended June 30, 2024, the Company incurred royalty expense of $5.0 million and $9.5 million, respectively, on sales of SYFOVRE, which is included in cost of sales on the condensed consolidated statements of operations and comprehensive loss.

11. Commitments and Contingencies

The Company has certain non-cancelable purchase obligations related to the manufacturing of drug substance. The Company has agreed to purchase from Bachem Americas, Inc. a significant portion of its requirements for the pegcetacoplan drug substance. Under a commercial supply agreement with NOF Corporation ("NOF"), the Company has agreed to purchase activated polyethylene glycol derivative, or PEG, which is a component of pegcetacoplan. In September 2024, the Company terminated the minimum purchase obligation with NOF for 2025. Under these agreements, as of June 30, 2025, the Company is obligated to pay up to $91.8 million to these vendors. As a result of the termination of the minimum purchase obligation with NOF, the Company incurred an expense of $6.4 million, which was included in cost of sales on the consolidated statements of operations and comprehensive loss for the year ended December 31, 2024. As this amount is due in January 2026, it is included in accounts payable on the condensed consolidated balance sheet as of June 30, 2025 and included in other liabilities on the condensed consolidated balance sheet as December 31, 2024.

In addition, the Company has other non-cancelable purchase agreements as of June 30, 2025, under which it is obligated to pay up to $11.2 million to vendors.

The Company is a party to a master lease agreement under which the Company leases vehicles with initial terms of 36 months from the date of delivery. If the Company were unable to take delivery of a previously ordered vehicle, the Company may incur nominal fees.

Indemnifications—In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend indemnified parties for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has not incurred any cost to defend lawsuits or settle claims related to these indemnification provisions.

Legal—During the normal course of business, the Company may be a party to legal claims that may not be covered by insurance.

On August 2, 2023, Judith M. Soderberg filed a putative class action in the United States District Court for the District of Delaware against the Company and certain current and former executive officers of the Company (the “Complaint”). The Complaint alleges, among other things, that the defendants violated Sections 10(b) and/or 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder by misrepresenting and/or omitting certain material facts related to the design of SYFOVRE’s clinical trials and the risks associated with SYFOVRE’s commercial adoption. The Complaint seeks, among other relief, compensatory damages and equitable relief in favor of the alleged class against all defendants, including interest, and reasonable costs and expenses incurred by plaintiffs, including attorneys’ and expert fees.

On October 2, 2023, the defendants moved to transfer the action to the United States District Court for the District of Massachusetts. On October 23, 2023, the Court appointed Ray Peleckas and Michigan Laborers’ Pension Fund together as Co-Lead Plaintiffs and assigned the action the caption In Apellis Pharmaceuticals, Inc. Securities Litigation, Case 1:23-cv-00834-MN. The Co-Lead Plaintiffs filed an amended complaint on February 8, 2024 (the “Amended Complaint”). The Amended Complaint is brought on behalf of a class of all persons and entities who purchased or otherwise acquired Apellis common stock between January 28, 2021 and July 28, 2023, inclusive, names the Company and Cedric Francois, our chief executive officer, as defendants, and makes similar allegations, asserts the same claims and seeks the same relief as the Complaint.

On March 17, 2025, the Court granted the defendants' motion to dismiss the amended complaint with prejudice and without leave to amend. On April 16, 2025, the plaintiffs filed an appeal to the United States Court of Appeals for the First Circuit.

On December 19, 2024, purported stockholder Patrick Campbell, and on December 30, 2024, purported stockholder Kenneth Olson filed putative stockholder derivative lawsuits in the United States District Court for the District of Massachusetts on behalf of the

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Company against the Company’s directors for breach of fiduciary duty, unjust enrichment, waste, and alleged violation of Section 14(a) of the Exchange Act related to the design of SYFOVRE’s clinical trials and the risks associated with SYFOVRE’s commercial adoption. The complaints seek monetary and punitive damages, and costs, including attorneys’ fees. On January 21, 2025, the cases were consolidated under the caption In re Apellis Pharmaceuticals, Inc. Derivative Litigation, No. 1:24-cv-13128-JEK. By the same order, the Court stayed the stockholder derivative litigation pending the Court’s ruling on the defendants’ motion to dismiss in the securities class action.

The Company’s businesses may also be subject at any time to commercial disputes, product liability claims, personal injury claims, third-party subpoenas or various other lawsuits arising in the ordinary course of business, including intellectual property infringement, employment or investor matters, and the Company expects that this will continue to be the case in the future.

12. Net Loss per Common Share

The following table presents the calculation of basic and diluted net loss per common share (amounts in thousands, except per share amounts):


	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Numerator:
Net loss	$	(42,151	)	$	(37,657	)	$	(134,376	)	$	(104,080	)
Denominator:
Weighted-average number of common shares used in net loss per common share - basic and diluted		126,024			123,904			125,740			123,430
Net loss per common share - basic and diluted	$	(0.33	)	$	(0.30	)	$	(1.07	)	$	(0.84	)

Shares outstanding presented below were excluded from the calculation of diluted net loss per share, prior to the use of the treasury stock method, as their effect is anti-dilutive (in thousands):


	As of June 30,
	2025		2024
Convertible notes		2,379		2,379
Stock options to purchase common stock		9,338		8,299
Unvested restricted stock units		4,876		4,381
Shares expected to be purchased under employee stock purchase plan		112		67
Total		16,705		15,126

13. Segment Information

The Company operates as a single operating segment, which is the discovery, development and commercialization of novel therapeutic compounds to treat diseases with high unmet needs through the inhibition of the complement system, which is an integral component of the immune system. The Company defines its segment on the basis in which internally reported financial information is regularly reviewed by the chief operating decision maker ("CODM") to analyze financial performance, make decisions, and allocate resources. The CODM is the chief executive officer (“CEO”). The Company’s CODM reviews consolidated net loss for purposes of assessing performance, making operating decisions, allocating resources, and planning and forecasting for future periods.

The following table presents information about reported segment revenue, segment loss, and significant segment expenses as provided to the CODM with respect to the Company’s single operating segment for the three and six months ended June 30, 2025 and 2024:

Apellis Pharmaceuticals, Inc. 10-Q