Royalty Cut Nets Apellis $275M Cash; Aspaveli royalties capped at 1.45×

Rhea-AI Filing Summary

On 1 July 2025, Apellis Pharmaceuticals (NASDAQ: APLS) filed an 8-K announcing a Royalty Buy-Down Agreement with Swedish Orphan Biovitrum (Sobi).

• Up-front consideration: Sobi will pay Apellis $275 million in cash within five business days of closing.
• Milestone: Up to $25 million becomes payable upon European Medicines Agency (EMA) approval of Aspaveli for C3G and IC-MPGN.
• Royalty reduction: In exchange, Apellis will reduce Sobi’s royalty obligations under their October 2020 collaboration by 90 %, effective immediately.
• Royalty cap: The discount lasts until cumulative reduced royalties equal 1.45× the total amounts paid under the new agreement; thereafter, the original royalty rates resume.
• Lender consent: Sixth Street Lending Partners consented to the deal. As a condition, Apellis extended by one year the period during which prepayment premiums apply on its May 13 2024 credit facility.

The transaction delivers up to $300 million in non-dilutive liquidity, strengthening Apellis’ near-term cash position while delaying—but not eliminating—future royalty income from Aspaveli in Sobi territories. The 1.45× cap preserves long-term upside once Sobi recovers its investment. Investors should weigh immediate balance-sheet relief against the temporary 90 % royalty haircut and the extended prepayment-premium window on existing debt.

Positive

• $275 million immediate cash infusion strengthens liquidity without equity dilution.
• Additional $25 million milestone tied to EMA approval provides upside.
• Royalty discount is temporary and capped at 1.45× payments, preserving long-term upside.
• Received lender consent, avoiding covenant issues and demonstrating creditor support.

Negative

• 90 % reduction in Aspaveli royalties lowers near-term revenue from Sobi territories.
• Apellis agreed to extend prepayment-premium period by one year, reducing debt-repayment flexibility.

Insights

Financial Analyst

TL;DR Up-front $275 M cash improves liquidity; royalty concession limits short-term revenue—overall modestly accretive.

Apellis converts a long-tail royalty stream into immediate, non-dilutive cash, a useful tool amid continuing commercial ramp and pipeline spend. The 1.45× recovery cap means Sobi must remit only about $399-$434 M in discounted royalties before full rates reset, implying a potential 2- to 3-year duration (sales-dependent). Cash proceeds can reduce draw-downs or fund trials without equity dilution, lowering financing risk. Extending the prepayment-premium period slightly reduces financial flexibility but does not increase coupon or covenant burden. Net impact leans positive for liquidity and runway, neutral-to-slightly-negative for near-term royalty revenue.

Biotech Industry Specialist

TL;DR Deal trades early Aspaveli economics for cash; strategic bridge as company advances broader complement pipeline.

Royalty buy-downs are common when partners seek cost relief and innovators seek cash. Apellis retains full commercialization rights in the U.S. and gains funding to accelerate life-cycle indications where it keeps higher economics. The 90 % cut is steep but temporary, capped by a clearly defined 1.45× multiple, preserving long-term participation. Contingent milestone aligns incentives around EU label expansion. Operationally, lender consent removes refinancing overhang. Given Aspaveli’s still-building European trajectory, sacrificing a portion of nascent royalties for immediate capital appears strategically sound, leaving intrinsic franchise value largely intact.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 1, 2025

Apellis Pharmaceuticals, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware		001-38276		27-1537290
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS 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

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

Item 1.01 Entry into a Material Definitive Agreement.

On July 1, 2025 (the “Closing Date”), Apellis Pharmaceuticals, Inc. and its subsidiaries Apellis International GmbH and APL DEL Holdings, LLC (collectively, the “Company”) entered into a Royalty Buy-Down Agreement (the “Royalty Agreement”) with Swedish Orphan Biovitrum AB (Publ) (“Sobi”).

Under the Royalty Agreement, Sobi agreed to pay the Company an upfront payment of $275 million within five business days after the Closing Date, and up to an aggregate of $25 million upon EMA approval of Aspaveli for C3G and IC-MPGN, and the Company agreed to reduce Sobi’s royalty payment obligations under the Collaboration and License Agreement by and between Sobi and the Company, dated as of October 27, 2020 (the “Collaboration Agreement”), by 90%, effective as of the Closing Date, subject to defined caps tied to Aspaveli’s performance, including an initial cap of 1.45x the amounts paid by Sobi to the Company under the Royalty Agreement, after which Sobi’s royalty payment obligations under the Collaboration Agreement will revert to 100%.

The lenders under the Company’s financing agreement with Sixth Street Lending Partners and the guarantors and lenders party thereto, dated as of May 13, 2024 (the “Financing Agreement”), have consented to the Royalty Agreement, and, in connection with that consent, the Company has agreed to extend by one year 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 Financing Agreement.

The above description of the Royalty Agreement is a summary only and is qualified in its entirety by reference to the Royalty Agreement, which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2025.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

				Apellis Pharmaceuticals, Inc.
Date: July 1, 2025				By:		/s/ Timothy Sullivan
						Timothy Sullivan
						Chief Financial Officer

FAQ

How much cash does Apellis (APLS) receive under the royalty buy-down agreement?

Sobi will pay $275 million up-front, with up to $25 million in additional milestone payments.

What happens to Sobi’s royalty rate on Aspaveli sales?

Sobi’s royalty obligation is reduced by 90 % effective July 1 2025 until a specified cap is reached.

When do the original royalty rates resume?

Once cumulative reduced royalties equal 1.45× the payments made under the new agreement, the rate reverts to 100 %.

What milestone is required for the extra $25 M payment?

The milestone is triggered by EMA approval of Aspaveli for C3G and IC-MPGN.

Did Apellis need lender approval for this transaction?

Yes. Sixth Street Lending Partners consented, and Apellis extended prepayment-premium periods by one year as part of the consent.

Where will the full royalty agreement be available?

Apellis will file the agreement as an exhibit to its Form 10-Q for the quarter ending 30 September 2025.