Biogen swoops on Apellis with $5.6bn offer

In today's second sizeable M&A deal, Biogen has agreed to buy Apellis for around $5.6 billion, seeking to get control of two approved therapies for kidney and eye disorders.

Biogen is offering $41 per share for Apellis, with another $4 on offer if C3 inhibitor Syfovre (pegcetacoplan), approved by the FDA in 2023 for sight-robbing disorder geographic atrophy (GA), meets certain sales targets.

Shares in Apellis had shot up 136% in pre-market trading at the time of writing, reaching more than $40 from its close of just over $17 yesterday.

In a statement, Biogen said that buying Apellis will boost its near- and long-term sales prospects and accelerate its entry into nephrology.

Apellis' other approved product, Empaveli (also pegcetacoplan), is used to treat C3 glomerulopathy (C3G) and paroxysmal nocturnal haemoglobinuria (PNH), while Biogen has an anti-CD38 antibody called felzartamab in clinical testing for a range of kidney diseases, including a phase 3 programme in kidney transplant recipients.

Apellis reported Empaveli sales of $102 million last year, up around 4% in the prior year, but is anticipating additional sales momentum if ongoing studies in follow-up indications focal segmental glomerulosclerosis (FSGS) and delayed graft function (DGF) in kidney transplant patients are positive.

Syfovre is the company's main earner, growing 4% to $587 million last year, with the promise of an uptick from a new prefilled syringe formulation due to be filed in the coming months. Meanwhile, Apellis is working on a combination of Syfovre with follow-up C3 inhibitor APL-3007, which is in mid-stage clinical testing for GA.

Biogen said it is expecting mid-to-high teens for the two products "at least through 2028."

Adding Apellis will give the company additional revenues at a time when it is facing the first biosimilar competition to its big-selling multiple sclerosis therapy Tysabri (natalizumab) in the US, adding to pressure stemming from competition to other top products, including oral MS therapy Tecfidera (dimethyl fumarate) and spinal muscular atrophy (SMA) therapy Spinraza (nusinersen).

"This acquisition immediately advances Biogen's ongoing transformation," said chief executive Chris Viehbacher, who added that he expects a "significant proportion" of Apellis employees to make the switch to his company.

Biogen will fund the initial $41-per-share stage of the acquisition in cash, borrowing some of the $5.6 billion. The additional $4 payments include $2 tied to Syfovre achieving annual sales of $1.5 billion or more between 2027 and 2030, with another $2 payable if it crosses the $2 billion sales threshold in that time frame.

The full $4 will be payable if the drug crosses the $2 billion sales threshold in calendar 2031, but doesn't meet either of the other two targets.

News of Biogen's bid for Apellis came as Eli Lilly revealed a $7.8 billion takeover offer for sleep disorder specialist Centessa Pharma.