Can Apellis Find a way to Inhibit the Complement System & Treat Intermediate AMD?

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Clinical trials of complement inhibitors recently have produced some disappointing results, but Apellis remains committed to demonstrating its own inhibitor can help bring relief to people battling geographic atrophy and AMD.

10 Top Topics in this OIS Podcast:

  1. What’s this about a Face Transplant?
  2. A successful spinout from Potentia.
  3. How Apellis came together.
  4. What is complement immunotherapy?
  5. The thoughts behind withdrawing the IPO.
  6. Slowing down geographic atrophy
  7. Plans for the $47 million round.
  8. What about other companies targeting the complement cascade?
  9. Why is C3 positioned to succeed?
  10. How do you see the field playing out?

Podcast Transcript
Tom Salemi: Hi, everyone, this is Tom Salemi. Welcome back to the OIS Podcast. Recently at conferences like Angiogenesis, there’s been a great deal of discussion about the complement system, basically the drugs that are trying to target this cascade of interacting proteins to treat diseases like AMD. At Angiogenesis, there was some disappointing clinical news from Novartis in particular. It’s been an area that’s had some potholes. But we’re talking today with a company that is still very optimistic about their approach to targeting the complement cascade as a treatment for AMD. Cedric Francois is the CEO of Apellis Pharma, and Apellis has had its own hiccups lately. It did try to go public; it wasn’t able to. But it followed up that shortfall by raising $47 million for a series D. And Dr. Francois is still very optimistic about the company’s approach to targeting the complement cascade. And in this Podcast he’ll explain why he feels that Apellis’ approach is the one that is likely going to actually produce and effective drug against AMD. So it’s a great conversation about a very promising area within ophthalmology, but also a discussion as to how ophthalmology companies are able to ride out the bumps and really make strong pushes toward developing the next generation of ophthalmic drugs. So I’ll step aside and let’s have this conversation with Dr. Cedric Francois of Apellis Pharma.

TS: Dr. Cedric Francois, welcome to the Podcast.

Cedric Francois: Thank you very much. Happy to be here.

TS: Happy to have you. You guys have had a busy few weeks. I know you were in Miami at the Angiogenesis Conference. We’ll hit upon that a big later. But I wanted to just talk about Apellis’ recent goings on. Transactionally, you had some news on the financing front that we can get into. But first of all, I don’t know if this is interesting to everybody; it is to me. But you’re a physician, as I introduced you as doctor, but your training, or at least a lot of your work had been done – your postgraduate training was in pediatric and transplant surgery. And you were involved somehow in the Louisville face transplant team. What was your involvement in that, and how does that translate to being an ophthalmology CEO?

CF: I don’t know if we can cover that in 20 minutes.

TS: Well, do your best. What was your involvement in the transplant?

CF: Well, that’s why I came to Louisville, Kentucky, which is not exactly a biotech hub, but a fantastic place. And in 1999 they did the first hand transplantation here, and I wanted to join that team on the research side because I was very interested in the immunosuppressive therapies that allowed the transplantation of quote-unquote organs that contain skin, which initially was the hand, and then afterwards became the face transplantation effort. And it was great and fantastic to be very early on to be involved in that pioneering work. I then did my PhD, and during my PhD started working with a group at Harvard, and we started a company called Potentia Pharmaceuticals. And with Potentia, we literally ended up on ophthalmology because we saw a disease, age related macular degeneration, where we were convinced that an immunological process was at work, driven by complement activation that we believed was very important in the vasogenesis of that condition. This was in very early days we’re talking, 2003, 2004, when it was really preclinical and very scientific still, not really developing drugs. When in 2005 the first associations were made between single nucleotide polymorphism, so genetic snips, in the complement pathways, and patients with macular degeneration, there was much further corroboration over the years after that between the role that complement might play in that disease, and the possibility for complement inhibition to be beneficial in slowing down the progression or maybe even halting AMD. And Potentia was all we needed, because we were young and wild to move forward with a first complement inhibitor called POT4, which we advanced into clinical trials, and in 2009 Alcon went into a licensing and option to acquire agreement with Potentia at the time, which left us basically with a team with nothing much more to do than to start another company.

TS: Well, what else are you going to do?

CF: We became Apellis. And with Apellis Pharmaceuticals, we really became very interested in the underlying immunology that we had come to believe in, not just in macular degeneration, but in many other conditions as well, which we call [PH17?] diseases, which is a bit of a misnomer. But for lack of a better description, these are conditions that share in common that there is an initial insult that provokes them, but when that initial insult is gone, these diseases become self-propagating. And you can call it autoimmune conditions, but it’s a little bit more specific than that. These are medical conditions like macular degeneration, but also like chronic obstructive pulmonary disease like psoriasis, inflammatory bowel disease, multiple sclerosis, where we see remarkably similar biology at work, and where we have come to believe that complement activation plays a key role in making these diseases self-perpetuating, in spite of the initial insult being gone. And so we have coined our objective is to do what we call complement immunotherapy because we believe that by inhibiting the complement pathways we might be able to do something that is disease modifying in those conditions. So that’s how plastic surgery and in ophthalmology and in immunology, I guess.

TS: Well, it’s worked for you so far, so keep doing what you’re doing. It’s remarkable and unremarkable how much of a role the immune system is playing in biotherapeutics and the development of new diseases. I mean we’re seeing so much in immuno-oncology, but really, you’re right, it touches so many different parts of the body, including ophthalmology.

CF: Well, I’m happy you bring that up because the way we look at it, when you take a step back away from complement is that in the past 5 to 10 years we’ve seen the whole revolution in immuno-oncology. And really, when you look at the immune system, the adaptive immune system, when it dysfunctions, you kind of get 2 broad categories of problems, right? One is you can develop cancer. The other is you can develop problems with autoimmunity. And in cancer, the conventional approach has always been to get rid of as many cancer cells as possible, and try to fix the problem that way. And now we know that making sure that your immune system takes care of business probably is arguably a much wiser and better and more profound approach to that problem. While in autoimmunity equivalent to that is for decades all we’ve been interested in doing is to suppress the immune system to deal with inappropriate activation and kind of the symptomatic consequences of that. But the real approach to autoimmune conditions should be to correct the dysfunction that actually causes it. And we believe that complement can do that, complement inhibition can do that. But there are many ways to, and don’t mean that to be misunderstood, but to toy, to play around with the adaptive immune system so that you can really correct what is fundamentally misaligned and bring it back into normal homeostatic state.

TS: And the technology you’re working with it came from University of Pennsylvania? Is that right?

CF: That’s right, yeah. So there’s a kind of – one of the godfathers of complement is a professor called John Lambris who works at the University of Pennsylvania, has been there for several decades, and who developed this class of compounds called compstatin derivatives, which are really fantastic and really unique inhibitors of complement factor C3. And what’s unique about C3 is that it sits centrally in the complement cascade, and inhibits all of the effects of complement, regardless of which pathway of activation led to its dysregulation. So it’s a very comprehensive way of inhibiting the complement pathways.

TS: Fascinating. And as exciting as these stories are to hear, obviously you need to also pay the bills, so the financing comes into play. Let’s talk a bit about what you’ve had to handle recently. You did try to go public. You filed to go public and made the decision recently – it was announced recently, anyway, to withdraw the IPO, I’m assuming because of the market conditions. But you can get into that. In your answer, the question is what was that process like of deciding not to go forward with the IPO? Was it pretty obvious what the route would be? Or is there a lot of weighing pros and cons and it’s really sort of a gut check at the end of the day?

CF: I think it’s a little bit of both. But I think what’s key is to have the right investors in your company, right? We have a fantastic syndicate of investors that we brought together in this private round. And this is a syndicate of investors that is interested in the long term vision for the company, not to do a quick flip, to do an IPO and try to get out of the stock like some investors try to do sometimes. So we really believe in our company as a company of fundamentals. We think that complement is a pathway, or I should say, a whole chapter of immunology that we call the sleeping giant sometimes, right, that has been left untouched for so long, where there are so many indications that could benefit from complement inhibition, and where we have a great way of doing that because again, we act centrally and shut everything down. Later on, we can become more sophisticated within those complicated pathways. But we wanted to have a syndicate of investors that believed in the broad potential of inhibiting this part of immunity. It can take 2 years, 5 years, 10 years. At the right time, obviously these investors will have to find a liquid event, and return money to their investors. But we don’t need to do that in the next year or even in the next 2 years. We’re going to continue to build value and get back to the public markets if and when the time is right.

TS: And a lot of that, I think, will rely upon your lead product in ophthalmology. Tell us a bit about where it’s at and what it’s targeting. It’s going after a form of AMD, or AMD, correct?

CF: Yeah. So in macular degeneration, just for clarity, because sometimes this term gets confused, we have dry macular degeneration. And dry macular degeneration is a confusing term because some people refer with that to the early form and intermediate forms of AMD, where you have 65 to 75 or older individuals who develop these lipid deposits in the back of the eyes called drusen. The key factor there is when you have drusen, you can often walk around with that until you pass away, and it never causes any serious problem. However, in a percentage of these patients, and you know, if you take all patients with drusen, all of those – we’re probably not talking about much more than 15% – you get an advancement to what we call the advanced form of macular degeneration which can manifest itself in 2 forms. The first one is the advanced dry form of the disease. And that is commonly referred to as geographic atrophy. The reason why it is called that is because when you look at the back of the eyes with patients with GA, you have literally these islands of dead retina where you can look straight through to the choroid, and it looks like a map, you know, a map of destruction, unfortunately. But it is a dry process. In other words, neovascularization is not a part of that process. And then you have conversely the advanced wet form of the disease, where you get new blood vessels that grow into the back of the eye, which on top of that are leaky blood vessels. So you get exudation in the back of the eye. And the well-known products, Lucentis, Eylea, Avastin, etc., Conversept, are products that are anti-VEGF agents that can seal these blood vessels. We now have possibly another product today in the pipeline coming from Ophthotech and Regeneron that by blocking BDGF might also eliminate the new vessels themselves, not just make them less leaky. But the standard of care today in macular degeneration is that the only thing we can do is that when you happen to have advanced AMD that is wet is that we can stop leakage of blood vessels in the back of the eye. If you have the advanced form of the dry side, where you have geographic atrophy, there is nothing on the market that can slow down or stop that progression. But the ultimate standard of care in macular degeneration should not be to wait until the retina is dying and for you to have advanced disease. But the ultimate standard of care should be to take patients with intermediate AMD who have these drusen deposits, identify those patients that are at risk in the near future of progressing, and stopping that process. And we have a long way to go to that, but I look at it as a 3 step process. We did anti-VEGF. Now we need to find drug agents that can block the progression on the GA, and then tomorrow we will look at intermediate AMD. And where we have a [?] right now is in that second spot, trying to slow down geographic atrophy. The only drug that has ever shown an ability to significantly slow down the progression of geographic atrophy is in a phase 2 clinical trial run by Genentech Roche. The trial was called the Mahalo study, and a drug compound which is a salve against one of the complement sectors called Lampalizumab was shown to reduce that progression in patients with geographic atrophy. We can talk about that more as well if you want to.

TS: I just want to take a quick break from this conversation to remind you to go to We’ve got a whole boatload of great ophthalmology content there, podcasts like this one, written reports, video interviews. Check out, recently redesigned, and really a fantastic source for ophthalmology news. Now back to this conversation.

TS: Well, what is the state of – where are you in clinical trials? I want to just get into that a little bit. How far along are you, and what do you have planned? And going back to the financing aspect, you’ve raised 47 million from – in this private round. How far is that going to take you in your clinical testing?

CF: So $47 million allows us to complete proof of concept in our 3 clinical programs. We cannot provide – we don’t want to provide more detail that that, but I think in the context of macular degeneration what’s key here is that we have currently ongoing a 240 patient phase 2 clinical trial in patients with geographic atrophy, where we evaluate the ability of our lead compound called APL2 to slow down the progression of geographic atrophy. Our trial was designed to be very similar in design to the Mahalo study that Genentech Roche ran. The reason why we did that is because the Roche program did an injection every month and every other month with a salve against complement factor D, which sits upstream in the complement cascade, and you know, only inhibits one of the activation pathways. So we wanted to find out if by inhibiting broader, we can also have a broader effect. And so you know, even though you cannot really compare these studies, the design was meant to give us further insight. Also in the Mahalo study, the once every month and once every other month regimen with an intravitreal injection is what we decided to replicate in this study as well, to find out if every other month injections might work as well, especially with geographic atrophy, you know, would make it easier on patients to be compliant.

TS: And where are you conducting those trials?

CF: In the United States and in Australia. And we expect to be fully enrolled by the spring with the readouts at 12 months for the summer of next year.

TS: You mentioned some other companies that are also working the space. Novartis had some news recently, its approach seeking to target C5. It wasn’t particularly positive news. Can you bring us up to date on what was reported? And what’s the implication for other companies that are targeting the complement cascade?

CF: Yeah. So you alluded correctly to the trial by Novartis. Maybe before I dive into that, I think it’s important to bear in mind that the complement cascade is incredibly complex. I mean so you’re talking about something that probably rivals the clotting cascade in terms of complexity, where you have 3 pathways that can lead to activation. You know, the classical, the mannose binding lectin, and the alternative pathway. They all converge on complement factor C3. And then you get multiple effects of complement that come out of that. And the effects of complement can be split a little bit artificially to events that take place on the cell surface of target cells that are under quote-unquote attack by complement, versus what we call the fluid phase of complement, where factors get released in the interstitial fluid that play very important signaling roles in adaptive immunity. When in 2005, these snips were discovered in complement to be associated with macular degeneration, we had a whole bunch of stuff to figure out, right? One was is this only associated with the incidence, or is it also associated with the progression of the disease? Is it associated with the early forms of the disease versus the late forms, you know, wet type versus geographic? All these things were unclear. And within that complexity, also the fact of which part of the complement affects the cell surface components, versus these fluid [faced?] signaling components are really important? And to kind of put that in context, if we accept the premise that complement activation is bad for the retina in macular degeneration, then that can be bad either because complement attacks the retina directly, and that would be through the cell surface components. In that case, if you inhibit complement, you are really following a symptomatic approach, right, where you try to protect these retinal cells against insult by complement, versus on the other hand, complement playing an important role not as a direct aggressor of the retina, but a much more important role as a regulator of immunity in the back of the eye, where other immune elements, like macrophages, etc. come in and cause destruction through secondary mechanisms. The reason why these two are very different, and it’s not that they’re mutually exclusive, right, but they’re very different in terms of where you want to target the complement cascade if you want to affect these 2 sides of the equation. If you inhibit complement factor C5, you are very much making a bet on the direct insult to the retina, right, the attack on the cells, and the cell surface events to be the problem in the disease. If you believe that immune regulation is the main contributor to the disease, then C5 is too far downstream in the cascade. You want to go upstream to complement C3, or for example, as Genentech does, complement factor D, because the alternative pathway accounts for approximately 80% of activation and products that contribute to the fluid phase. So when we approach macular degeneration with C3, we felt that we could cover all possible eventualities without knowing too much. I hate to admit it, but that’s kind of what happened. It’s not more scientific than that. But in the meantime, I think we found out much more of the past couple of years with a lot of evidence pointing in the direction for the role of the fluid phase and the immune regulation being important, and the role of complement playing a role there. Now we also start seeing now the first kind of, I’d say, circumstantial evidence from clinical trials that further seem to contribute to that hypothesis. With anti-C5 specifically targeted at those cell surface events, we actually had a study before Novartis came out that was run by Dr. Rosenfeld, who coincidentally is one of the co-organizers of this conference and this angiogenesis conference in Miami. He had already run a trial using Alexion’s Soliris, given intravenously to patients with geographic atrophy to find out if the progression of the disease could be slowed down. And that study was negative. So that was the first inkling that this C5 inhibition specifically might not be the right approach in geographic atrophy. But there was a sense that maybe intravenous was not the right route of administration, etc. And Novartis then ran the study looking at the intravitreal administration of their antibody against C5, which for all intents and purposes we can see is highly similar to Soliris. And now we know, unfortunately, you know, it was already read out about a year ago, I think, maybe even longer. But now we know that anti-C5 administered intravitreally also does not work. And now obviously that causes a lot of people to question, well, what about does that mean that complement in the retina is a losing proposition? And I think that is absolutely not the case. I’m obviously very subjective about this.

TS: Of course, you need to be. You’re the CEO of the company.

CF: Yeah. But also, looking as a scientist at this, and having probably done more deep work than a lot of other groups, there is a really important difference between where you target the complement pathways, vis-à-vis the effect that you can have. And you know, Genentech and Roche took a decision to move into phase 3 not purely based on hope, but I’d say on qualified optimism, right? And that qualified optimism stems from a deep understanding of how the fluid phase can affect adaptive immunity. And I will give you one simple example that points in that direction. When you look at macrophages in the retina, so in these diseases you can get [?] that come into the tissue that sit there. You get macroglia that become involved. These cells will evoke stress on the retinal tissues and play a much more important role in contributing to the damage. Well, coincidentally, and again, this is an association, not causal, but it’s interesting, is that in wet type macular degeneration, the predominant phenotype of those macrophages are what we call M2 macrophages, which are kind of the reparative, pro-angiogenic, profibrotic macrophage phenotypes, which coincides with the clinical phenotype of wet AMD. Whereas in geographic atrophy, you see predominately M1 phenotype macrophages, which are the aggressive, damaging, all hell breaks loose type of microphage phenotypes, which coincides with, again, the clinical phenotype of GA. And there are a whole bunch of those associations that point in the direction of the role of the fluid phase. Which brings me to your last point, which is Novartis then decided not to abandon their anti-C5 program, but to instead combine their anti-C5 approach with an antibody against properdin. Now properdin is the only natural activator of complement that we have. So normally, complement gets activated by bacterial products and certain other elements, but nothing that comes out of our own body, typically, at least not in a natural context. Properdin is a complement factor that specifically drives complement activation. Now properdin is also something that’s interesting because it drives complement activation towards the membrane attack complex formation. So it is very interesting to see how this can play a role in the overall homeostasis of the retina. But one thing that I would like to point out is that 10 years ago – this might go a little bit too deep for this podcast, but yeah, I’m not going to too deep into that. I think suffice to say is that Novartis looked into doing molecular surgery within the complement pathways, where combining properdin inhibition, they believed, might make up for the lack of sufficient inhibition of complement by going too far downstream. And my only word of caution would be there that by inhibiting properdin, what you do is actually drive the complement activation away from the membrane attack complex, and the cell surface properties, towards the fluid phase. And it will be interesting to see if that truly makes the disease get better or not. To summarize, we’re far from knowing everything. I think between the read out of the phase 3 clinical trial by Genentech and our phase 2 clinical trial with the anti-C3 approach, we’re going to like get a lot of additional answers, with the final remaining question being is geographic atrophy too late for complement inhibition to have an effect, or do we want to go earlier in intermediate AMD, and is that where you want to block complement to avoid progression to the advanced form of the disease?

TS: Last question: how do you see this field playing out? Do you see a large percentage of the approaches being targeted today being successful? Or is there really going to be one moonshot that makes it all the way?

CF: I’d love to think that we are the moonshot.

TS: Of course you are. That’s what I was implying when I asked the question.

CF: Well, I think, look, I don’t believe in single moonshots. I think there’s always room for improvement. Beyond the mechanism, there’s also the product profile, right? I mean let’s say that complement inhibition is a good thing to do, and let’s say it’s a good thing to do in geographic atrophy. Then you don’t want to do an injection every month or even every other month, right? Then the question becomes is if you do complement inhibition, do you really need to do this chronically for many years, as is the case with anti-VEGF agents? Or can you really change the immune microenvironment where you can have long periods where you don’t need drugs anymore? And if that’s the case, where are we going to end up with good companion diagnostics, where we can actually identify patients or the state of the disease, I should say, based on blood biomarkers? So you can treat patients when it’s need and not kind of – no pun intended, but blindly outside of that? So I don’t believe in a moonshot. I do think that with C3, again, subjectively, we have a good opportunity to look at broad complement inhibition. The difficulty that we face and everybody that works in this disease space is that we make these intravitreal injections, and we don’t really know whether we are truly inhibiting complement where it needs to be inhibited, right? We kind of run the experiment based on the maximum exposure that you can give. You inject as much as you can as often as you can, and you hope that it does what it was designed to do. But when studies are negative, is that because the drug doesn’t work? Hence, is it because the mechanism doesn’t work or is it because the drug didn’t get where it had to go, or wasn’t there for long enough? And that’s something on which, unfortunately, we don’t have enough of a handle.

TS: Well, it’s going to be an exciting story to follow. I appreciate you taking so much time to share your story and just to talk about this exciting realm within ophthalmology and within biopharmaceuticals.

CF: Was an absolute pleasure. Thank you so much, and I look forward to discussing it more in the future.

TS: Sure thing.

TS: Dr. Cedric Francois, thanks for joining us on the OIS Podcast and for sharing Apellis’ story. I’m sure we’ll be following it at future OIS’s. Speaking at future OIS’s, we hope to see you at OIS@ASCRS coming up on May 5. Go to After you’ve read and listened to all of our great content, register to attend OIS@ASCRS and we will see you in New Orleans. Thanks for listening.