Apellis Pharmaceuticals, Inc. (APLS) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the Apellis Pharmaceuticals PEGASUS Results Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Tracy Vineis, Vice President of Communications at Apellis.

Good morning, and thank you for joining us today to discuss the detailed results from the PEGASUS pivotal study, evaluating pegcetacoplan or APL-2 in adults with paroxysmal nocturnal hemoglobinuria, or PNH, which were presented virtually today in an oral session at the 25th Congress of the European Hematology Association. For those participating via conference call, we have made the slides available via webcast. Before we begin, I would like to point out that we will be making forward-looking statements that are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional detail. On today's call, I am joined by Dr. Cedric Francois, Co-Founder and Chief Executive Officer of Apellis; and Chief Medical Officer, Dr. Federico Grossi. Joining us for the Q&A section will be our Chief Financial Officer, Timothy Sullivan; Chief Commercial Officer, Adam Townsend; and Dr. Peter Hillmen, Professor of Experimental Hematology at the University of Leeds, an investigator in the PEGASUS study. With that, I'm pleased to turn the call over to Cedric.

Thank you, Tracy, and good morning to everyone on the call and joining via webcast. We are excited to welcome you to this morning's call to discuss the detailed results presented today at EHA from our positive PEGASUS Phase III study evaluating pegcetacoplan compared to eculizumab in adults with PNH. In January, we were proud to announce that pegcetacoplan met its primary endpoint, demonstrating superiority to eculizumab with a difference in adjusted means of 3.8 grams per deciliter of hemoglobin at week 16 and promising results on key secondary endpoints that we believe will translate into a clinically meaningful benefit to patients. Pegcetacoplan is the first and only investigational therapy to demonstrate superiority compared to eculizumab on improving hemoglobin levels in patients with PNH. Today, new data presented at EHA, reinforced the findings from January, demonstrating pegcetacoplan's potential to elevate the standard of care for patients. Pegcetacoplan, a targeted C3 therapy, demonstrated substantial improvement over C5 inhibition in the following important ways: First, hemoglobin levels improved by 3.8 grams per deciliter, 53% higher than the eculizumab arm; second, LDH was normalized in 71% of patients on pegcetacoplan versus 15% on eculizumab; third, 85% of patients on pegcetacoplan were transfusion-free versus 15% on eculizumab; and fourth, patients on pegcetacoplan achieved an 11 point difference in FACIT-fatigue score over patients on eculizumab. These improvements were achieved while showing a comparable safety profile and with patients receiving optimized eculizumab dosing, including 30% on higher than label dose in the study. Importantly, these findings were observed independent of prior transfusion status. Before we review the data set in more detail, I'd like to discuss the significant unmet need that exists for people living with PNH. It is estimated that there are approximately 15,000 people with PNH worldwide. PNH is a rare, chronic, life-threatening blood disorder that, when left untreated, has historically resulted in death in about 35% of patients over the course of 5 years. PNH is characterized by the destruction of oxygen carrying red blood cells through processes called intravascular and extravascular hemolysis. Intravascular hemolysis refers to the direct destruction of red blood cells inside the blood vessels. Extravascular hemolysis refers to the removal of red blood cells from circulation in the liver and the spleen. Intravascular and intravascular hemolysis work in tandem to cause the debilitating loss of red blood cells in PNH. Currently available treatments inhibit the complement cascade, a part of the body's immune system, downstream at a point called C5, which controls intravascular but not extravascular hemolysis. Consequently, people living with PNH continue to suffer from debilitating symptoms, including severe fatigue and transfusion dependence. Pegcetacoplan targets C3, which is upstream in the complement cascade. By being upstream, pegcetacoplan can control both intra and extravascular hemolysis, thus better controlling the disease and providing relief to patients. I'd now like to turn the call over to our Chief Medical Officer, Dr. Federico Grossi, who will review the results presented at EHA today.

Well, thank you, Cedric. First, I would like to express my excitement about the data presented today at EHA on our pivotal study. The results presented today show that pegcetacoplan by targeting C3 may have the potential to control both extra and intravascular hemolysis and, thus, redefine the treatment for people living with PNH. Before reviewing the results, I wanted to provide a brief summary of the trial design for PEGASUS. A detailed schematic of the trial design can be found on Slide 7. So I will only give a high level overview. PEGASUS is a multi-center, randomized, open-label, active-comparator study in 80 adults with PNH, who had been on eculizumab treatment that had hemoglobin levels of less than 10.5 grams per deciliter. The primary objectives of the study were to establish the efficacy and safety of pegcetacoplan compared to eculizumab. The secondary endpoints included transfusion avoidance, change from baseline in reticulocytes, change from baseline in LDH and change from baseline in FACIT-fatigue scores. Now we can turn to the results. To help you follow the charts and graphs, pegcetacoplan is represented in orange and eculizumab in gray. As Cedric mentioned before, pegcetacoplan met the study's primary endpoint for efficacy, demonstrating superiority to eculizumab with a statistically significant improvement in adjusted means of 3.8 grams per deciliter of hemoglobin at week 16 with a p-value of less than 0.0001. Importantly, the data presented today show that this benefit in hemoglobin level was consistent across patients independent of prior transfusions. As shown on Slide 9, in patients with low or no transfusion requirements, meaning patients who received fewer than 4 transfusions in the prior year, the mean baseline hemoglobin was 8.9 grams per deciliter. In this group, pegcetacoplan treated patients had an adjusted mean hemoglobin increase of 2.97 grams per deciliter compared to eculizumab treated patients who had a change of minus 0.01 grams per deciliter from baseline. Similarly, in patients with high transfusion requirements, meaning patients who received 4 or more transfusions in the prior year, the mean baseline hemoglobin was 8.5 grams per deciliter. In this group, pegcetacoplan treated patients had an adjusted mean hemoglobin increase of 2.11 grams per deciliter compared to eculizumab treated patients who had a change of minus 4.02 grams per deciliter from baseline. Based on the prespecified analysis, hemoglobin levels following transfusions were excluded. This is done to isolate the impact of treatment from that of transfusions, which can otherwise artificially increase hemoglobin levels. This explained why a drop in hemoglobin levels can be observed in patients with high transfusion requirements in the eculizumab group. Turning now to secondary endpoints. As shown on Slide 10, pegcetacoplan effects on transfusion avoidance was consistent across patients independent of prior transfusions. As you can see in the subgroups on the right, in patients with low or no transfusion requirement, 85% of pegcetacoplan treated patients were transfusion-free over 16 weeks compared to 31% of eculizumab treated patients. In patients with high transfusion requirement, 86% of pegcetacoplan treated patients were transfusion-free compared to only 4% on eculizumab treated patients. Turning now to Slide 11. In addition to transfusion avoidance, and as shared in January, all key secondary endpoints trended in favor of pegcetacoplan at week 16. Today, we presented data on normalization rates of the primary and key secondary measures. The most striking results are on LDH, 75% of pegcetacoplan treated patients achieved LDH normalization compared to only 15% of eculizumab treated patients. This demonstrates the pegcetacoplan's control of intravascular hemolysis. On reticulocytes, 78% of pegcetacoplan treated patients achieved reticulocyte normalization compared to 3% of eculizumab treated patients. This reflects a relief of the bone marrow of patients with PNH, when both intra and extravascular hemolysis are under control. Even on hemoglobin in these severely ill patients, 34% of patients on pegcetacoplan achieved normalization compared to no patients on eculizumab. Another critical issue for patients living with PNH is fatigue. 73% of pegcetacoplan treated patients achieve at least a 3 point improvement in FACIT-fatigue score compared to no patients on eculizumab. If you bring context to this, a 3 point improvement in FACIT-fatigue score is considered to be clinically meaningful. As Cedric said earlier, patients in pegcetacoplan achieved an 11 point difference in FACIT-fatigue over patients on eculizumab. Slide 13. Illustrates the important finding, which we had hoped to accomplish in the design of the study that the full benefit of pegcetacoplan was achieved in 1 month of combined therapy and then maintained when people switch to pegcetacoplan monotherapy. Equally important, and again, as anticipated, patients who discontinued pegcetacoplan and returned to eculizumab monotherapy showed a baseline numbers over the course of 1 to 2 months without safety concerns. Two other points I was noting here. First, indirect bilirubin and absolute reticulocyte counts and markers of extravascular hemolysis, and both improved with pegcetacoplan. Together with the LDH data, these results speak to pegcetacoplan's ability to control both intravascular and extravascular hemolysis and differentiate pegcetacoplan's targeted C3 approach from C5 inhibition. Finally, Slide 14 shows how C3 loading on red blood cells, which is known to be the driver of extravascular hemolysis, disappears almost completely with pegcetacoplan treatment, again, reflecting what happens clinically. Turning now to the safety data presented today. The safety profile of pegcetacoplan was comparable to eculizumab in this study as shown in Slide 15. No cases of meningitis and no death were reported in either treatment group. The most common adverse events reported during the 16-week randomized control treatment period were injections site reactions and diarrhea in the pegcetacoplan arm and headache and fatigue in the eculizumab group. Injection site reactions were mostly mild and were more frequent at study initiation when patients were getting used to subcutaneous infusions, none lead to trial discontinuations or dose modification. Diarrhea cases were also almost exclusively no, not associated with treatment initiation and mostly single event occurrence; here as well, not resulted in trial discontinuation or dose modification. Another common adverse event observed was hemolysis, reported in 4 patients in the pegcetacoplan group and 9 patients in the eculizumab group. Patients in the eculizumab group entered the study on an optimized dose and no change was made in response to the hemolysis events. By protocol, patients in the pegcetacoplan group could not be efficiently adjusted for dose, and, therefore, 3 of the 4 hemolysis events led to discontinuations. We believe that dose optimization will allow us to further reduce the occurrence of hemolysis on pegcetacoplan. In conclusion, these results demonstrate that pegcetacoplan control both intra and extravascular hemolysis in PNH. The robustness of pegcetacoplan's efficacy results together with its safety results suggest that pegcetacoplan has the potential to elevate the standard of care in PNH by addressing the totality of the disease. We are thrilled to be one step closer to making a difference in the lives of patients and families impacted by PNH. Back to you, Cedric.

Thank you very much, Federico. In conclusion, I want to reiterate the substantial improvements demonstrated by pegcetacoplan, the targeted C3 therapy over C5 inhibition in the PEGASUS study: 53% higher hemoglobin levels versus the eculizumab arm; 71% LDH normalization versus 15% on eculizumab; 85% of patients transfusion-free versus 15% on eculizumab; and an 11 point difference in FACIT-fatigue, all while showing a comparable safety profile and independence of prior transfusion studies. We are thrilled with these results, which reconfirm pegcetacoplan's potential to elevate the standard of care for all PNH patients. Last month, we announced our plans to submit a new drug application, or NDA, for pegcetacoplan for PNH to the U.S. FDA in the second half of this year. And today, we announced our plans to submit a marketing authorization application to the European Medicines Agency in that same time frame. Based on feedback from discussions with regulators, these positive PEGASUS data will serve as the basis of our marketing applications. We also expect 48 week top line PEGASUS data in the second half of this year. The PEGASUS results underscored the importance of targeting C3 in PNH, and we are working to bring pegcetacoplan to the PNH community as quickly as possible. Finally, it is worth noting that the PEGASUS study data also validates the further development of pegcetacoplan as a platform approach for serious complement-driven diseases. We remain the only company with a targeted C3 therapy in late-stage clinical trial, and we are on track to complete enrollment in 3 Phase III studies this month. Our 2 Phase III DERBY and OAKS trials for pegcetacoplan in patients with geographic atrophy will be fully enrolled in the coming weeks, and we expect top line results from these trials in the third quarter of 2021. We also expect that enrollment will complete shortly for our Phase III PRINCE trial in treatment-naive patients with PNH with top line data in early 2021. And finally, we plan to share soon the strategy and timing for further clinical development of pegcetacoplan for patients with cold agglutinin disease, C3 glomerulopathy and other indications. We look forward to sharing our continued progress with you. In closing, I'd like to thank the patients who volunteered, their caregivers, investigators, health care providers, our employees and investors, all of whom were so important in bringing this potential treatment closer to patients. And with that, operator, please open the call for questions.

[Operator Instructions] Our first question comes from the line of Jonathan Miller from Evercore ISI.

Congrats again on the data. I guess 2 for me. First on discontinuations. So I understand that the Soliris arm has a more optimized dose and leftover hemolysis in the Apellis arm maybe is being driven by that lack of optimization, inability to do optimization on the trial. Would your expectation be that discontinuation of therapy would be near 0 on the Apellis arm as well if you could do that dose optimization? And in the future trials, would we expect to see much lower discontinuation rates or a little more even, I should say, discontinuation rates between this and the comparator arm? Secondly, on the LDH endpoint, I'm struck by the fact that when you include the transfusion data, the post transfusion data, obviously, that endpoint looks a lot better, but the -- while the endpoint itself is very -- highly variable, it also has the largest change on the Apellis arm when you compare without post transfusion data and with post transfusion data. So what's -- given the relatively small number of patients that got transfusions on the Apellis arm, what is driving that enormous difference -- enormous variability in LDH, the small number of patients?

Thank you so much, Jon, for those questions. So first of all, to talk about the discontinuations that happened. So near 0 is a tall order. And as scientists, we don't like to go there. Do we believe that we can improve? Absolutely. So it is important to bear in mind that in the PEGASUS study, we had a small dosing adjustment that was possible, that was incorporated in the protocol, but it was not aggressive enough. And when somebody has a hemolysis event, physicians want to take immediate and quick action. So that was something that maybe with the benefit of hindsight, we could have been more aggressive on in the Phase III, but we will now further evaluate whether that can be changed. I think we can absolutely reduce it to near 0, it's obviously a tall order, but we will see where we can get. I think it is also important to note that these hemolysis events happens after the 1-month of combined dosing, right, where pegcetacoplan was added to eculizumab, and when eculizumab was withdrawn, so it is right in that phase. Once patients are stable on the pegcetacoplan dose, we have seen, with now a lot of patient years behind us, a very robust and steady course on these patients. So I think in the end, it will become a matter of when the patients are weaned off of their C5 inhibitor to work with dosing adjustments should it be needed. And at least based on what we saw up till now in approximately 10% that may be needed. Now going to the LDH, so with the LDH, what's interesting is that the -- depending on the labs that you use, the levels are approximately 250 units per liter as the upper limit of normal. When a patient has an episode of hemolysis, and when that LDH is released from the red blood cells, the spike that you get is not an increase of 10% or 20% in LDH, it is a multiple of that, easily 10x, sometimes 20x that value. So you can imagine in a study with 80 subjects where you even have 1 patient where all of a sudden you have a hemolysis event, right? If you put that against the background of an overall LDH measurement, that creates a lot of variability. And that is really what accounted for the difficulty in using this as a non-inferiority statistical analysis. But what is key is that LDH is an important safety marker for intravascular hemolysis by extension for your control on thrombosis, and we are very happy with the data that we have in this study.

Our next question comes from Madhu Kumar from Baird.

I really have 2 for Peter Hillmen and then 1 for the company. So Dr. Hillmen, first, in your practice, what is the fraction of patients that you think would really be actionable to use APL-2 on in terms of their PNH having anemia associated with extravascular hemolysis? And then secondly, if you were to get a patient onto APL-2 and they were to show good induction of hemoglobin, good reduction in red blood cell transfusions, how likely would you be to want to consider switching them to a new agent, if a new agent were to come along that showed similar properties to what APL-2 has shown so far to date? And I'll follow-up with the question for the company.

Okay. Thanks for the question. So in terms of the proportion of patients, who we would consider for pegcetacoplan type therapy, I mean, Cedric, I think mentioned it early on, all of our patients on eculizumab have some degree of extravascular hemolysis, which is unveiled by the C5 inhibition. And the mean sort of reduction in hemoglobin is about 4 grams per deciliter, which is obviously a significant amount. The patients who got into the PEGASUS trial were the patients who had the most extreme hemolysis, extravascular hemolysis on eculizumab, and were clearly very symptomatic and often transfused. So I tend to think about it in thirds; about 1/3 of our patients, I would say, would have been eligible for PEGASUS with severe extravascular hemolysis causing symptoms; and then probably about another 1/3 of patients have significant anemia, and many patients have symptoms because of anemia, fatigue with lethargy, and would benefit from therapy. And so going back to the first question, I think, these patients go into PEGASUS because they had the most severe hemolysis, are probably going to be the ones that we'll see -- we shouldn't see with possibly a higher rate of breakthrough. And so 3 out of 41 is sort of manageable, I think. And as Cedric said, we haven't really explored how to control that. I would hope that with the less severely affected, we wouldn't see as much. So that's a proportion that we would certainly consider. And the results in this trial are very impressive compared to what we've seen; obviously, done a lot of work with eculizumab and other C5 inhibitors. We just don't see a normalization of reticulocyte count and hematology as we're seeing in -- with pegcetacoplan. So that really is different to any of the trials we've had. In terms of the switch, well, if a patient is well controlled on this therapy, and the patients seem to tolerate it well, we would be reticent to switch patients unless there's a good reason to switch them, if someone was stable and doing well on a therapy. So in our practice, we wouldn't generally switch patients unless there was a specific reason. I mean, obviously, route to administration and patient preference comes into that. But I think if the patient was stable, we would be cautious about switching particularly to a therapy that might have a different target. So switching C5 inhibitors is sort of fine because you -- ravulizumab is same as eculizumab effectively. But switching to a different target would be a concern.

Okay. Great. And then for the company, when you think about the second half filings in the U.S. and Europe, is the expectation to file for PNH in the context of a C5 inhibitor generally, or PNH in the context of eculizumab? Specifically, how are you thinking about the clinical data and what kind of line of therapy, what kind of prior therapies APL-2 thereto have support?

Yes. Thank you so much, Madhu, and so good to hear your voice. So I think that the -- look, the PEGASUS trial was designed to accomplish a number of things, right? The first one was to expose or to just kind of elucidate, I should say, how important extravascular hemolysis is in this disease, and how much better this disease can be controlled, if you target C3 versus C5 and address the problem of extravascular hemolysis. So obviously, that will be reflected in our label discussions with the regulators; where the second element of this study was the fact that even on those transfusion or less transfusion-dependent or transfusion independent patients, we saw similar benefits as we saw in the transfusion-dependent patients. Again, going back to the point of the broad hematological control. And at the end of the day, I think in a couple of years, we will probably look back on C5 inhibition as kind of a limited control of PNH and where, hopefully, with this therapy and maybe with other therapies that come along, we can find a way to control extravascular hemolysis properly and really make these patients -- or get them as close as possible to a normal state with minimum hemolysis. So that is kind of a long-winded answer to your question. The bottom line is we'll seek for a broad label. We have a 4-month monotherapy phase in this study. Should there be any limitations on the label, we always have the PRINCE study for a potential supplemental NDA. But right now, we don't believe that, that will be needed.

Okay. Actually, I'll squeeze one last question. Among the 9 eculizumab patients, who had breakthrough hemolysis, how have they performed when they switched on to APL-2 as part of the long term or the label extension?

Well, that's the news for the next release, Madhu. So what's important here is 77 of 77 patients that were still in the study at the end of the 4-month randomized period, all 77 entered into the extension. And again, that stresses how much better these patients feel. I mean, for me, what was most striking and, quite frankly, a little bit painful because of the design that we had is that we had 39 subjects who came into the study, who for 1 month were able to experience the benefit of extravascular hemolysis control with pegcetacoplan. And then were told by the physicians, "Look, we're sorry, but you're in the control group, right? You're going to go back to being just on Soliris. But if you stay in the study, after 4 months, you will have the opportunity to go back into the extension on pegcetacoplan," and 39 of 39 patients went through that and made sure that they could go back. And I think that more than anything tells you how important it is in the context of making these patients feel better.

And Cedric, if I can just add to that last statement you made. I mean -- and I take some responsibility as being involved in the design of this trial from the beginning. So the switch back, that was quite difficult for patients because they had been chronically anemic and symptomatic and transfused for often years, and then within 4 weeks have a normal hemoglobin and were back functioning normally. And so of all the trials we've done where we randomized against one to another, it's been very difficult because the patient then has to go back for 4 months onto their old treatment. Even with the TRIUMPH study for eculizumab, where we had a randomization against placebo, they didn't know the benefits they were getting from the eculizumab in 2004 when we did that trial. And so this is really unique experience.

Thank you, Pete. And maybe just one little thing to add there because I think it's important. One of the important reasons why we did this was also from a safety point of view because when we designed this study, we asked ourselves a question, in the real world, what is the patient going to be anxious about if they are proposed with the option of switching from C5 to C3? And one of the things was, well, what if I try this and it doesn't work. So the first step was, you can try it on top of your drug, you don't have to stop taking your C5 inhibitor. And then should you not like what you -- your improvement after 1 month, well, you can discontinue the C3 inhibitor while staying on your C5 inhibitor and go back to where you were before in 1 to 2 months and do that safely. Last piece because extravascular hemolysis is, we believe, not dangerous for patients, and this study showed that. So there's reversibility in everything, and that was something important that we needed to show in this study.

Our next question comes from the line of Anupam Rama from JPMorgan.

Congrats on the update. Maybe just a follow-on question to the prior question. But what are the final gating factors here to the second half filing here in the U.S. and EU? Just what are the gating factors there? And then can you remind us of the dosing protocol in the PRINCE study and if there -- so you guys made some comments about dose optimization and maybe walk us through if that's part of the protocol for PRINCE as well?

Thank you so much, Anupam. Great hearing you. So the answer to your first question is writing, making sure that as the first filer of an NDA, do that with top quality. We have hired extraordinary people to do that and we look forward to our first NDA and MAA submission. For the second question, I'm going to give the words to Federico to talk a little bit more about dosing in PRINCE.

Thank you, Cedric. The dosing schedule in PRINCE is the same with the same small increase in doses if the patient have hemoglobin. Now you need to think of PRINCE as a very different population because PRINCE studies have not been treated with eculizumab before. So it's very likely that they don't have as much more disease ongoing. And from a study perspective, it's important to have a stable dose at the same dose on regular basis to be able to determine what are the phenotypes of the patients that do not respond. So we have not, because of PEGASUS, included any major dose modifications in PRINCE because we need to establish that baseline and that's what we're doing. So we're going to study those modifications separately.

Congrats, again, on the data.

Our next question comes from Yigal Nochomovitz from Citigroup.

Congrats on a nice data set. I have one for Dr. Hillmen and one for the company. Dr. Hillmen, given this set of data in the treatment experienced population for pegcetacoplan, I'd love to hear your thoughts on how you would view using pegcetacoplan versus eculizumab in the treatment-naive population?

Well, I mean, I think, as I said earlier, I think the results are very impressive. And we know that all patients with eculizumab, ravulizumab will have extravascular hemolysis. So in terms of -- and also the fact that, that is subcutaneous and the patient can self-administer the drug makes it more attractive than our current C5 inhibitors. So I don't have any great concern for the majority of patients going on to treatment. I think we have to collect more safety data. I mean with any drug that's licensed, we obviously get more experience as we get through the next 1 or 2 years of treatment. And I guess the only patients that would have like an anxiety about treating with a novel agent such as this would be someone who we treat for active thrombosis. I mean, because we know that -- what eculizumab does in that situation. That's a very small proportion of our patients now who had to start treatment for that reason. But that would be the only ones that would probably favor C5 inhibitors until we have some more data on thrombosis, which obviously will be slow because it's quite a rare event in PNH.

Okay. And then Cedric or Federico, just on the infections, obviously, you didn't have any sepsis or meningitis. Could you just comment in a little bit more detail on the types of infections that you did observe for both treatment arms, please?

Federico?

Yes, yes. Thank you, Yigal. Most of the infections were typical infections that you see, upper respiratory tract infections, urinary tract infections, and they all resolved in the normal course with a single course of antibiotics. So no major surprises there and equally distributed across the arms.

Next question comes from Ellie Merle from Cantor Fitzgerald.

Just on your interactions on, I guess, both with FDA and EMA, any differences in sort of how they're thinking about label discussions and endpoints in patient populations and any trends that you've noted there? And then, I guess, another question for Dr. Hillmen. You mentioned that you think a lot of your patients, I guess, are stable and doing well on therapy and, therefore, you wouldn't sort of consider switching. Can you sort of maybe give us more color on, I guess, how you're considering maybe like someone that's stable on C5 and sort of how you're thinking about some of these endpoints like hemoglobin levels and what you would consider, I guess, stable or target levels?

Thank you, Ellie. Great to hear you, and I will pass the word to Pete in a second. But the answer to your first question is quite simple. So as far as it goes for the label, we believe that this was a switchover study, but with that 4-month monotherapy phase in that and the control that we had with it. So we will go for a label that is as broad as possible. So for now, we will not comment beyond that, but more to follow in the months to come. Pete, I will hand it to you for the second question, please.

Okay. I think there are 2 -- when I was referring to the first question, it was whether the patient was established on PEGASUS treatment arm, whether we would switch them to an alternative possible inhibitor. So in terms of C5 patients, so we have a large number of patients, obviously, who are on C5 inhibitors. And I think the patients who -- so I think it would fulfill the PEGASUS criteria. We -- if we have the availability of the drug, we would consider those as ideal patients because we have the data. I think that a significant proportion of the other patients who run a low hemoglobin may well benefit from a drug like pegcetacoplan. And the route of administration is also quite attractive for those patients because the -- we currently have eculizumab every 2 weeks, which obviously is an undertaking. So I would think that probably half of our patients, you sort of discussed -- have a discussion with now, if we were able to use it, and then as we get more confidence, I think that would probably increase. In terms of switching later on, I mean, the sort of different targeted therapy, we probably wouldn't change to -- from a very effective agent to one that we didn't have data about of -- in fact the data of how to basing things. But there we're quite a long way behind really. Does that answer your question?

Our next question comes from Steve Seedhouse from Raymond James.

One of the questions FDA evidently had about your primary endpoint was whether hemoglobin increase would translate into clinical benefit in the patients that already have high hemoglobin. So I was hoping you could comment, first, on whether hemoglobin further increased in patients that had sort of the highest level of baseline in the study? I understand, obviously, there's a cutoff at the screening measurement. But just in whatever subgroup, you want to comment on those that were the highest if hemoglobin further increase and also FACIT-fatigue and transfusion dependence and all those things that you reported, were they better or similar in the pegcetacoplan arm in the patients with highest hemoglobin at baseline. And then I guess, just what would be the read-through for patients with hemoglobin greater than 10.5 grams per deciliter at baseline?

Thank you so much, Steve. So that is a really, really great question. I think, obviously, it was our primary endpoint. We're, of course, very happy with the data on hemoglobin because as I mentioned in the beginning of the call, it really comes down to the broad hematological correction and the associated benefit to the quality of life of the patient. It's not just about hemoglobin, right? Now we'll give you an example of patients that may have normal hemoglobin levels. Those were not included in the study, of course, but patients with normal hemoglobin levels almost always only get there because they have very good bone marrow. And you can have patients that are producing 3 to 4x the normal outputs from their bone marrow in order to get there. Now bear in mind, these are patients who have sick bone marrow to start with. And I cannot cite you a paper that would tell you that having a high reticulocytosis for decades is a problem, right? But if you can avoid it, and why would you not do that? And I think that kind of speaks a little bit to what Pete mentioned, and I would love to hear his feedback on that is that at the end of the day, if you can control hemolysis properly and do it with a drug that is equally safe, why would you not do that. And we're obviously early still. But with now between the studies that we have close to 150 patient years of dosing, we start to feel very good about what we've seen. Maybe, Pete, you would like to add something to that?

Thanks, Cedric. A couple of things. First of all, I mean, obviously, we took the worst patients into PEGASUS and the mean hemoglobin has -- obviously, was way below 10.5, it was 11.5 at week 16 and consistent. And the difference between that and eculizumab arm is despite the fact that the majority of patients in the eculizumab arm are being transfused. So obviously, that will affect the hemoglobin to some extent, and there's still a very big difference between the 2 arms. So I think that would suggest that -- especially with the normalization of reticulocytes, which happens actually very quickly, which is very impressive, shows that you were switching off the process of extravascular hemolysis. And I would anticipate in the majority of patients, who are anemic on C5 inhibitors, they would respond into the normal range, that's what I -- having now treated quite a number of patients in this trial, I would predict would happen. I think the other sort of important point is the fatigue score. So the fatigue score in a trial probably where we randomize between placebo and eculizumab, there was 11 point difference. And in this occasion, there's over 11 point difference between pegcetacoplan and eculizumab and obviously in the worst affected patients, but that's a very meaningful difference. And if you look at the curves, I mean, 52 is the maximum you can get on the fatigue score, and we're getting quite close to it on the pegcetacoplan arm of these most of the affected patients. So I think it is -- that a normalization of hemoglobin and a normalization of hematic parameters is what immediately makes the data stand out to me.

I appreciate it. Okay. I had just a follow-up mechanistically. Actually, maybe 2 quick follow-ups. The mild diarrhea signal in the treatment arm, what do you think mechanistically is going on there? Does it have to do with the volume of injection or excipient's formulation, something not necessarily related to C3 inhibition per se?

Yes. No. Thank you, Steve. I mean it's a mystery to me, to us why that happens because it doesn't happen after the start of treatment. So it's spread out over the 4 months. They are mild. And most importantly, and I want to stress this again, these were almost exclusively single events. Now if you look at the percentage difference, 20% on pegcetacoplan, 0% on eculizumab, you would think that it's direct related. We don't know by which mechanism that would be. But yes, we don't know the answer to that. What's important here is they were almost exclusively single event and mild in nature. So we'll have to figure that out.

Yes. I mean 8 out of 9 were single events, grade 1. So it really hasn't been a clinical issue in my experience of treating the patients.

Okay. That's helpful. And then I just had a point of clarification for myself on the hemoglobin data. So the high transfusion requirement subgroup, the Soliris patients obviously dropped about 4 grams per deciliter. You mentioned this excludes measurements post transfusion, hence, the drop. I just want to clarify. So the exclusion of those measurements seems to only apply to the post-treatment measurements, but not the baseline. So the baseline are, in fact, impacted by recent transfusions, given that decline. Is that correct?

Yes, that's correct. So the best way to talk about it is that many of these patients, the severely affected patients need and there's is a patient, who used that term top-up transfusions. So not only do they need transfusions, they need them on a regular basis, and they're often going to be on the schedule every 4 weeks, every 6 weeks. If now they come into the study and that interval becomes longer, right, then obviously, they're going to go lower than where they were before, right? So that is the -- and what was important in this study is that once you get a transfusion, obviously, you will disproportionately favor the transfusion-dependent population on the hemoglobin values. So that is why the analysis had to be done the way it was.

The next question comes from Matthew Luchini from BMO.

And congrats on the data and the progress. So 2 for me. First, I guess, the answer to this was alluded to in the one of the prior question -- answers. But I just wanted to be clear that the 48-week extension data, the long-term PEGASUS data, is not a gating factor to file. So that's just a point of clarification, one. And then secondly, as we think about the potential label expansion opportunities that you're thinking about, whether it's C3G or CAD, maybe you could just give us a sense, given where we are right now and the data that you have in hand and other data that's being read out from potential competitors, how your -- sort of what gating factors are on your mind? Or how you're weighing the different pros and cons of pursuing some of those other opportunities for pegcetacoplan?

Yes. Thank you so much, Matt. So on the C3G and the cold agglutinin disease and the other indications, we'll talk about that more in the future. And I have to apologize, Matt, your line was breaking up a little bit when you asked the first portion of your question. Could you quickly repeat that, please?

I just wanted to confirm that the next PEGASUS update, the 48-week is not a gating factor to your ability to file?

Okay. No, it is not. So we will give a 120-day safety update. That's the purpose, but from an efficacy perspective, we have what we need.

Our next question comes from Justin Kim from Oppenheimer.

Congratulations on the presentation. I had 2 questions left for Dr. Hillmen. Dr. Hillmen, as you think about the potential availability of pegcetacoplan for your patients, given the randomized withdrawal design of the study, how informative have those experiences been for adoption of the products for your patients switching from eculizumab and potentially ravulizumab? And then a second question on FACIT-fatigue scores. The sensitivity of these findings over even hemoglobin were encouraging. Do you anticipate that fatigue could be the important sign of extravascular hemolysis and a rationale for the drug's use in milder patient subset?

Okay. So in terms of the -- for the first question is -- because I got the second one. So the first question was, just remind me what was the first question?

Sure. How informative has the randomized withdrawal design, how informed -- yes.

Okay. Okay. Yes. So I think -- I mean, I'll try and answer as is are correct. I mean we've had issues with 1 or 2 other C5 inhibitors about stopping and switching where it has been a problem. And so it's been really encouraging that, first of all, every patient responds to the combination in PEGASUS. And we know we can safely withdraw it. So I think it's really assuring well. I mean the only problem we run into really with withdrawal was stopping the pegcetacoplan, and that obviously we won't do in the real world. So I was comfortable with that. And I think that as Cedric said, I think it gives you more assurance that, that patient is doing well. Although I suspect that we won't need a month overlap. I mean we see the change, and you'll see it. You see it on the curves that were shown very quickly with the combination. So I suspect in the real world, we probably won't need this longer run to rollover. It doesn't concern me there, rather we have all the data as well with the combination. So obviously, with ravulizumab, there will be more C5 drug around for longer because of the half-life, but that obviously isn't a concern in this situation. So I'm sort of happy about that. In terms of fatigue, yes, I mean if you -- I mean, I had recently the patient group meeting here with probably 50 patients in the room, and fatigue is -- many on treatment, and fatigue is an ongoing issue for patients on eculizumab. I mean -- and it's better because they're not having any complications and they know their hemoglobin is not being transfused as much but there is ongoing fatigue. So I think as we get more comfortable with the therapy, that will be an important criteria for switching for patients who are significantly fatigued, yes.

So our next question comes from Brian Cheng from Bank of America.

Congrats on the progress. My first question is for Dr. Hillmen. One quick question on your presentation at EHA. Can you provide more color on the 2 discontinued patients, who had lower serum concentration of pegcetacoplan before their hemolysis events? So the question on that is there -- is it the low serum driven more by compliance or are there other confounding factors?

Okay. So certainly, I mean, 2 of the patients were mine, so we didn't see -- there was no -- there's been really no compliance issues within this study. Patients have taken the doses as and when they should have done. So I don't -- I'm sure there's no compliance issue. There's a anxiety about patients with uncontrolled intravascular hemolysis. So when the LDH goes up, we tend to switch the patients. And I don't think we had -- and Federico mentioned, I don't think we had -- we didn't have the dosing we would have needed to try to stop the breakthroughs really. And so I think in subsequent studies, we're going to have to do that. So does that answer your question?

Yes. And maybe for Cedric and the team, based on your discussions with the FDA and EMA, can you talk about what your base case assumption is for the labeling? And more importantly, how does that differ from what eculizumab, Soliris has currently in the label for PNH?

Yes. Thank you so much, Brian. So as I mentioned earlier, we are not ready to talk about label yet. I just want to mention that we do have a long monotherapy phase in the PEGASUS study. And so we'll talk more about that in the future. But we are hopeful that we will get a broad label, but that's subject to further discussions.

Our next question comes from Phil Nadeau from Cowen and Company.

I guess 2 clarification questions on the data. First, on the adverse event profile, there's 2 different categories of severe adverse events that have different numbers. And I'm kind of curious what's the difference between those categories? And what drives the difference. So you cite severe treatment -- treatment-emergent adverse events is 19.5% for pegcetacoplan versus 12.8% for eculizumab, but then serious are 17% for pegcetacoplan versus 15% for eculizumab. So what's the difference between those 2 categories? And what kind of events drove those percentages? And then second is on transfusions. What was the baseline requirement for transfusions in the 16 weeks leading into the study for both arms?

Federico?

Yes. Well, the difference is on the criteria, what is severe and serious adverse events. So serious adverse event has a clear definition, and there is a regulatory definition extension of hospitalization, death and such. And those are serious. And a serious adverse event can be mild, moderate or severe. And then on any of the AEs, again, you have the same criteria, mild, moderate and severe for any type of AEs. I don't have top of my head what were those severe adverse events. But yes, they were equally distributed on both arms. Did that answer your question on that, on the difference between the 2?

I think so. So the severe adverse events is more of your own characterization whereas the serious is something that's a regulatory defined criteria? Is that what you're saying?

Yes. So any AE can be -- you have a grade, mild, moderate and severe. And then serious is just a definition for seriousness, that is a regulatory definition, yes.

Got it. Okay. And then on the transfusions, what was the transfusion requirements for the 2 arms, meaning the...

Transfusion requirements or the criteria for transfusions?

What proportion of patients needed a transfusion before beginning this study over the prior 16 weeks or 32 weeks?

So on the patients that require, 36% of patients require less than 4 transfusions before the -- sorry, it was a 50-50 split. Is that you're asking? How many patients -- sorry, I'm not getting the question right. What was the proportion of patients that require less than 4 and more than 4 before the study?

Well, I'm just curious whether -- so for most data for Soliris, you don't see 85% of patients needing a transition. So I guess I'm kind of curious, did more patients on Soliris needed transfusion in the trial than needed one prior to entering the study?

Yes. So we started approximately with a 50-50 split because we require that a minimum of 50% of patients were heavy transfusion-dependent, those with what we call the heavy burden of transfusions. The rest of the patients, some of them had 1 requirement in the past year, but most of the patients had 2 or 3, and that trigger -- that was the trigger, that 80%. So don't forget that the patients go into this co-treatment for month and then they lose C3 inhibition. So they get extravascular hemolysis and the trigger transfusion, and that's what led to that 80%. But we started with -- at 50% of patients with a requirement of 4 or more transfusions.

Our last question comes from Tiago Fauth from Crédit Suisse.

So I'm just curious, when you're talking about dose optimization, did you actually have any dose modifications in the APL-2 arm during the study? And how did that perhaps influence the responses for those patients? And perhaps one for Adam as you have the filings slated for the second year, if you could just briefly talk about your go-to-market strategy. Any plans for potential partnerships or any color you can provide at this moment?

Federico, can you take the first question and then Adam the second.

Yes. I'll take the first question. So the -- as Cedric before, the protocol didn't allow for a lot of room on dose optimization. So we had a single step dose increase that was based on LDH levels. But it was about a 10%, 15% dose increase, and that was not sufficient on some of the patients that had hemolysis. So what we're doing now as the future steps is trying to phenotype the patients that have hemolysis, and it was answered before by Pete, trying to determine what it is that makes these patients have low pegcetacoplan levels in the serum. So 2 efforts; one is find the right dose, but also try to phenotype the patients if we can determine priorly what are the patients that will require more dosing before they start pegcetacoplan.

Tiago, thanks for your question. It's Adam. So we've been preparing for the last year building out lean, commercial and medical affairs organizations in the U.S. and ex U.S. We are interacting compliantly with physicians through medical affairs, and we're also building great relationships with PNH communities all over the world. It's a great opportunity for us to elevate the standard of care in PNH. We also are very thorough in our homework. So we're looking at models. If there is a strategic partner that they can help us meet each of patients all over the world, we look at discussing those type of opportunities. But we have the capability to meet those needs ourselves and able to do it better with a strategic partner is something that we should obviously look at. So we're ready for a world, and we're ready to really, really meet those needs of the PNH patients around the world. And this data is just a great opportunity to do so.

Understood. Congrats on the progress, guys.

Thank you. This concludes our Q&A session. At this time, I would like to turn the call back over to Dr. Cedric Francois, CEO, for closing remarks.

Thank you so much. And thank you everyone who joined us this morning. In closing, today's news further demonstrated the potential of the pegcetacoplan to elevate the standard of care for people with PNH. It also validated our targeted C3 approach to developing treatments for serious complement-driven diseases. I want to give a special thank you to Pete for joining us, it really means a lot. We've been working together for such a long time with him and the rest of the PNH community which, is unbelievably patient dedicated, I think that's worth mentioning. Now we look forward to continuing our progress and keeping you updated along the way. Thank you very much, everyone.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.