Apellis Pharmaceuticals, Inc. (NASDAQ: APLS)

Sector: Healthcare Industry: Biotechnology CIK: 0001492422
Market Cap 3.02 Bn
P/B 7.53
P/E 67.11
P/S 2.97
ROIC (Qtr) 10.67
Div Yield % 0.00
Rev 1y % (Qtr) 132.98
Total Debt (Qtr) 475.37 Mn
Debt/Equity (Qtr) 1.18

About

Apellis Pharmaceuticals, Inc., a commercial-stage biopharmaceutical company, operates in the healthcare industry, specifically in the discovery, development, and commercialization of novel therapeutic compounds to treat diseases with high unmet needs through the inhibition of the complement system at the level of C3, the central protein in the complement cascade. The company's main business activities revolve around the development and commercialization of its lead product, pegcetacoplan, which is formulated for both intravitreal and systemic administration. Apellis...

Read more

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 480.60M provide 4.78x coverage of short-term debt 100.60M, demonstrating strong liquidity position and minimal refinancing risk.
  • Robust free cash flow of 78.64M exceeds capital expenditure of 225000 by 349.50x, indicating strong organic growth funding capability.
  • Operating cash flow of 78.86M fully covers other non-current liabilities 3.26M by 24.21x, showing strong long-term stability.
  • Cash reserves of 480.60M provide robust 1.72x coverage of current liabilities 279.53M, indicating strong short-term solvency.
  • Strong cash position of 480.60M provides 3.42x coverage of other current liabilities 140.32M, indicating excellent liquidity.

Bear case

  • Operating cash flow of 78.86M barely covers its investment activities of (225000), with a coverage ratio of -350.50, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (225000) provide weak support for R&D spending of 297.98M, which is -0x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • High receivables of 345.54M relative to inventory of 163.73M (2.11 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • The company's operating cash flow of 78.86M shows concerning coverage of stock compensation expenses of 109.07M, with a 0.72 ratio indicating potential earnings quality issues.
  • Free cash flow of 78.64M represents just -13.98x of debt issuance (5.62M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Biotechnology
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SMMT Summit Therapeutics Inc. 1,151.25 Bn -1,249.17 0.00 0.01 Bn
2 ONC BeOne Medicines Ltd. 485.22 Bn 7,078.40 97.58 1.90 Bn
3 VRTX Vertex Pharmaceuticals Inc / Ma 122.74 Bn 33.40 10.47 1.83 Bn
4 REGN Regeneron Pharmaceuticals, Inc. 82.16 Bn 18.24 5.73 2.71 Bn
5 ARGX Argenx Se 48.85 Bn 32.43 25,472.44 -
6 ALNY Alnylam Pharmaceuticals, Inc. 46.12 Bn 1,058.58 14.37 3.21 Bn
7 BNTC Benitec Biopharma Inc. 42.24 Bn -1,010.00 0.00 0.00 Bn
8 INSM INSMED Inc 28.75 Bn -24.29 64.32 0.74 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.86 11.12
EV to Cash from Ops. EV/CFO 38.45 26.73
EV to Debt EV to Debt 6.38 686.78
EV to EBIT EV/EBIT 33.07 -10.71
EV to EBITDA EV/EBITDA 36.95 8.30
EV to Free Cash Flow [EV/FCF] EV/FCF 38.56 25.45
EV to Market Cap EV to Market Cap 1.03 166.02
EV to Revenue EV/Rev 2.98 153.59
Price to Book Value [P/B] P/B 7.31 20.63
Price to Earnings [P/E] P/E 65.23 -0.19
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -12.47
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 0.17
Dividend per Basic Share Div per Share (Qtr) 0.00 0.01
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -0.14
Interest Coverage Int. cover (Qtr) 2.04 860.86
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 40.63 -26.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 20.68 756.81
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 141.39 -52.99
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 137.06 -4.39
EBIT Growth (1y) % EBIT 1y % (Qtr) 143.35 -62.52
EBT Growth (1y) % EBT 1y % (Qtr) 118.84 -19.16
EPS Growth (1y) % EPS 1y % (Qtr) 117.33 -4.04
FCF Growth (1y) % FCF 1y % (Qtr) 138.27 -33.35
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 46.02 264.38
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.96 0.14
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 1.72 3.83
Current Ratio Curr Ratio (Qtr) 3.54 7.27
Debt to Equity Ratio Debt/Equity (Qtr) 1.18 0.43
Interest Cover Ratio Int Coverage (Qtr) 2.04 860.86
Times Interest Earned Times Interest Earned (Qtr) 2.04 860.86
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 9.20 -17,746.13
EBIT Margin % EBIT Margin % (Qtr) 9.02 -18,101.92
EBT Margin % EBT Margin % (Qtr) 4.59 -18,961.86
Gross Margin % Gross Margin % (Qtr) 88.80 -9.24
Net Profit Margin % Net Margin % (Qtr) 4.40 -18,911.61