Apellis Pharmaceuticals Inc. could receive up to $1.25 billion from Swedish Orphan Biovitrum (Sobi) AB in their collaboration to develop systemic pegcetacoplan, a C3 therapy for treating several rare diseases in hematology, nephrology and neurology.

The collaboration between the two is a partnership of equals, Apellis CEO Cedric Francois told BioWorld, who added that he steered clear of bigger companies because he didn’t want to take a chance on getting lost in the shuffle.

“There are so many examples of large organizations where indications like we’re talking about can become deprioritized or less important,” he said.

The payment to Apellis includes $250 million up front, $80 million in committed development reimbursements paid over four years and up to $915 million in regulatory and commercial milestones, plus tiered double-digit royalties. The two companies said they plan to advance five parallel registrational programs that include two new programs in hematology. Both companies also will evenly split costs for any future global studies emerging beyond their initial development plan.

Pegcetacoplan, a synthetic cyclic peptide conjugated to a polyethylene glycol polymer, targets excessive C3 activation in the complement cascade, which is part of the immune system.

Cedric Francois, CEO, Apellis

In the deal, Sobi receives global co-development and exclusive ex-U.S. commercialization rights for systemic pegcetacoplan while Apellis keeps U.S. commercialization rights for systemic pegcetacoplan and worldwide commercial rights for ophthalmological pegcetacoplan, which is in two phase III Apellis studies for treating geographic atrophy.

Both companies plan to advance clinical development of systemic pegcetacoplan in five parallel registrational programs across hematology, nephrology and neurology, including new programs in cold agglutinin disease (CAD) and hematopoietic stem cell transplantation-associated thrombotic microangiopathy (HSCT-TMA). Both those programs should start in 2021, the companies noted.

In hematology, the programs are in paroxysmal nocturnal hemoglobinuria (PNH), CAD and HSCT-TMA. Marketing applications for treating PNH went to the FDA and the EMA based on positive phase III data. Sobi will lead the charge on development for a phase III study in CAD and possibly a registrational phase III in HSCT-TMA in 2021.

The co-development agreement also includes therapies for immune complex membranoproliferative glomerulonephritis and C3 glomerulopathy. Apellis has already begun and will continue its registrational program in both, which includes phase II and III studies.

Apellis’ potentially registrational phase II placebo-controlled randomized study is enrolling about 200 adults with sporadic amyotrophic lateral sclerosis (ALS), Francois told investors Oct. 27 on a conference call, with the first patient expected to be dosed by the end of 2020. He added that he believes C3 plays a central role in numerous neurodegenerative conditions. The primary endpoint will be the combined assessment of function and survival or caps ranked scores at week 52, he said.

Evercore ISI analysts wrote Oct. 27 that they believe Apellis’ first ALS data will be in 2022 with full data not until 2023 at the earliest. Alexion Pharmaceuticals Inc. has Ultomiris (ravulizumab-cwvz), its C5 complement inhibitor, in phase III for treating ALS. The primary study endpoint will be change from baseline in ALS functional rating scale-revised score.

The Apellis-Sobi deal brings a great deal of capital to Apellis, which Francois stressed was important for the company and its other development projects. Its now extended cash runway, according to Timothy Sullivan, Apellis’ chief financial officer, allows its to support new indications, execute a commercial launch in PNH in 2021, accelerate its early research programs and build out general operations. That financial cushion creates a comfort level, he added, “without feeling like we have to raise capital.”

Apellis stock (NASDAQ:APLS) dropped nine-tenths of a percent Oct. 27, to close at $35.53 per share, while Stockholm-based Sobi’s stock (STO:SOBI) rose 7.58% for the day at $159. Cowen analyst Phil Nadeau wrote Oct. 27 that while the deal makes “strategic sense” for Apellis, he suspects the day’s lackluster stock performance came “because the collaboration means a near-term acquisition” of Apellis is unlikely and also because some investors would have preferred Apellis “partner with a larger biopharmaceutical company.”