Apellis Pharmaceuticals (APLS) 10-Q 7 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	Apr. 30, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Trading Symbol	APLS
Entity Registrant Name	Apellis Pharmaceuticals, Inc.
Entity Central Index Key	0001492422
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		63,232,476

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 288,246,706	$ 176,267,666
Refundable research and development credit	1,755,639	1,473,591
Prepaid assets	20,509,948	24,333,851
Other current assets	15,570	364,113
Total current assets	310,527,863	202,439,221
Non-current Assets:
Right-of-use assets	6,621,807
Property and equipment, net	1,041,063	977,918
Other assets	162,345	116,420
Total assets	318,353,078	203,533,559
Current liabilities:
Accounts payable	11,916,152	10,254,938
Accrued expenses	7,342,601	5,103,002
Current portion of long-term debt		1,666,667
Current portion of right of use liabilities	1,127,720
Total current liabilities	20,386,473	17,024,607
Long-term liabilities:
Development derivative liability	60,736,000
Term loan facility		18,722,321
Promissory note	6,673,970	6,655,193
Right-of-use liabilities	5,566,811
Other liabilities	234,932	158,783
Total liabilities	93,598,186	42,560,904
Stockholders' equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized, and zero shares issued and outstanding at December 31, 2018 and March 31, 2019	0	0
Common stock, $0.0001 par value; 200,000,000 shares authorized at December 31, 2018 and March 31, 2019 and 56,279,307 shares issued and outstanding at December 31, 2018 and 63,218,476 shares issued and outstanding at March 31, 2019	6,322	5,628
Additional paid in capital	552,209,429	437,855,681
Accumulated other comprehensive loss	(120,645)	(122,807)
Accumulated deficit	(327,340,214)	(276,765,847)
Total stockholders' equity	224,754,892	160,972,655
Total liabilities and stockholders' equity	$ 318,353,078	$ 203,533,559

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, issued	63,218,476	56,279,307
Common stock, outstanding	63,218,476	56,279,307

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Operating expenses:
Research and development	$ 40,479,899	$ 17,402,890
General and administrative	8,170,671	4,035,255
Operating loss	(48,650,570)	(21,438,145)
Loss on extinguishment of debt	(1,208,132)
Loss from remeasurement of development derivative liability	(736,000)
Interest expense	(593,505)	(667,087)
Interest income	867,017	400,401
Other expense, net	(253,177)	(31,473)
Net loss	(50,574,367)	(21,736,304)
Other comprehensive gain:
Foreign currency gain	2,162
Total other comprehensive gain	2,162
Comprehensive loss, net of tax	$ (50,572,205)	$ (21,736,304)
Net loss per common share, basic and diluted	$ (0.87)	$ (0.43)
Weighted-average number of common shares used in net loss per common share, basic and diluted	57,897,390	50,353,812

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Changes in Stockholder's Equity - USD ($)	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Deficit [Member]
Beginning balance at Dec. 31, 2017	$ 148,942,860	$ 5,033	$ 298,201,480		$ (149,263,653)
Beginning balance, Shares at Dec. 31, 2017		50,334,152
Issuance of common stock upon exercise of stock options	225,361	$ 9	225,352
Issuance of common stock upon exercise of stock options, shares		94,868
Share-based compensation expense	1,610,188		1,610,188
Net loss	(21,736,304)				(21,736,304)
Ending balance at Mar. 31, 2018	129,042,105	$ 5,042	300,037,020		(170,999,957)
Ending balance, Shares at Mar. 31, 2018		50,429,020
Beginning balance at Dec. 31, 2018	160,972,655	$ 5,628	437,855,681	$ (122,807)	(276,765,847)
Beginning balance, Shares at Dec. 31, 2018		56,279,307
Issuance of common stock in follow-on offering, net of offering costs	109,603,849	$ 690	109,603,159
Issuance of common stock in follow-on offering, shares		6,900,000
Issuance of common stock upon exercise of stock options	192,005	$ 4	192,001
Issuance of common stock upon exercise of stock options, shares		39,169
Share-based compensation expense	4,558,588		4,558,588
Net loss	(50,574,367)				(50,574,367)
Foreign currency gain	2,162			2,162
Ending balance at Mar. 31, 2019	$ 224,754,892	$ 6,322	$ 552,209,429	$ (120,645)	$ (327,340,214)
Ending balance, Shares at Mar. 31, 2019		63,218,476

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Operating Activities
Net loss	$ (50,574,367)	$ (21,736,304)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense	4,558,588	1,610,188
Loss on early extinguishment of debt	1,208,132
Loss from remeasurement of development derivative liability	736,000
Amortization of right-of-use assets	72,725
Depreciation expense	40,503
Accretion of discounts for promissory note	18,777	17,073
Accretion of discounts for term loan facility	104,172	208,624
Changes in operating assets and liabilities:
Refundable research and development credit	(275,218)	(531,204)
Prepaid assets	3,824,196	(3,062,009)
Other current assets	24,854	(188,226)
Other assets	(45,925)
Accounts payable	1,906,521	921,805
Accrued expenses	2,764,408	(180,904)
Other liabilities	76,150	5,708
Net cash used in operating activities	(35,560,484)	(22,935,249)
Investing Activities
Purchase of property and equipment	(875,111)
Net cash used in investing activities	(875,111)
Financing Activities
Proceeds from issuance of common stock, net of issuance costs	110,262,000
Deferred issuance costs	(334,462)	(2,664)
Proceeds from development derivative liability	60,000,000
Proceeds from exercise of stock options	192,005	225,361
Repayment of term loan facility	(21,701,292)
Net cash provided by financing activities	148,418,251	222,697
Effect of exchange rate changes on cash and cash equivalents	(3,616)
Net (decrease) increase in cash and cash equivalents	111,979,040	(22,712,552)
Cash and cash equivalents at beginning of period	176,267,666	175,643,529
Cash and cash equivalents at end of period	288,246,706	152,930,977
Supplemental Disclosure of Financing Activities
Cash paid for Interest	$ 588,473	$ 551,750

Nature of Organization and Oper

Nature of Organization and Operations	3 Months Ended
	Mar. 31, 2019
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Nature of Organization and Operations	1. Nature of Organization and Operations Apellis Pharmaceuticals, Inc. (the “Company”) is a clinical-stage biopharmaceutical company focused on the development of novel therapeutic compounds to treat disease through the inhibition of the complement system, which is an integral component of the immune system, at the level of C3, the central protein in the complement cascade. The Company was incorporated in September 2009 under the laws of the State of Delaware and has its principal office in Crestwood, Kentucky. The Company’s operations since inception have been limited to organizing and staffing the Company, acquiring rights to product candidates, business planning, raising capital and developing its product candidates. The Company is subject to risks common in the biotechnology industry including, but not limited to, raising additional capital, development by its competitors of new technological innovations, its ability to successfully complete preclinical and clinical development of product candidates and receive timely regulatory approval of products, market acceptance of the Company’s products, protection of proprietary technology, healthcare cost containment initiatives, and compliance with governmental regulations, including those of the U.S. Food and Drug Administration (“FDA”). Development Derivative Liability On February 28, 2019, the Company entered into a development funding agreement with SFJ Pharmaceuticals Group (“SFJ”) under which SFJ agreed to provide funding to the Company to support the development of APL-2 for the treatment of patients with paroxysmal nocturnal hemoglobinuria (“PNH”) (“SFJ Agreement”). Pursuant to the agreement, SFJ paid the Company $60.0 million following the signing of the agreement, and agreed to pay the Company up to an additional $60.0 million in the aggregate in three equal installments upon the achievement of specified development milestones with respect to the Company’s Phase 3 program for APL-2 in PNH and subject to the Company having cash resources at the time sufficient to fund at least 10 months of the Company’s operations. The Company expects that those milestones will occur during 2019. In addition, upon the mutual agreement of the Company and SFJ, at any time after the earlier of the date that the Company has reviewed the primary endpoint data from its PEGASUS Phase 3 trial of APL-2 in patients with PNH and March 31, 2020, SFJ may fund an additional $50.0 million of the Company’s development costs (the “Additional SFJ Funding”). Follow-on Public Offering On March 11, 2019, the Company issued and sold 6,900,000 shares of its common stock at a price per share of $17.00 in a follow-on public offering (“2019 follow-on offering”) On April 23, 2018, the Company issued and sold 5,500,000 shares of its common stock at a price per share of $25.50 in a follow-on public offering (“2018 follow-on offering”) Liquidity and Financial Condition The accompanying unaudited condensed consolidated financial statements have been prepared on the basis of the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As of May 7, 2019, the date of issuance of these unaudited condensed consolidated financial statements, the Company believes that its cash and cash equivalents as of March 31, 2019 of $288.2 million The Company is subject to risks common to other life science companies in the development stage including, but not limited to, uncertainty of product development and commercialization, lack of marketing and sales history, development by its competitors of new technological innovations, dependence on key personnel, market acceptance of products, product liability, protection of proprietary technology, ability to raise additional financing, and compliance with FDA and other government regulations. If the Company does not successfully commercialize any of its product candidates, it will be unable to generate recurring product revenue or achieve profitability. Management’s plans in order to meet its short-term and longer-term operating cash flow requirements include obtaining additional funding. There are uncertainties associated with the Company’s ability to (1) obtain additional debt or equity financing (2) enter into collaborative agreements with strategic partners, and (3) succeed in its future operations. If the Company is not able to obtain the required capital to fund its operations from any of these, or is not able to obtain such funding on terms that are favorable to the Company, it could be forced to delay, reduce or eliminate its research and development programs or future commercialization efforts and its business could be materially harmed.

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Basis of Presentation	2. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Apellis Australia Pty Ltd, Apellis Ireland Ltd and Apellis Switzerland GmbH. All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and following the requirements of the Securities and Exchange Commission (the “SEC”), for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP have been condensed or omitted and, accordingly, the balance sheet as of December 31, 2018 has been derived from audited consolidated financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements. These financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of the Company’s financial information. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any other interim period or for any other future year. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2019. Fair Value of Financial Instruments The Company is required to disclose information on the fair value of financial instruments and inputs that enable an assessment of the fair value. The three levels of the fair value hierarchy prioritize valuation inputs based upon the observable nature of those inputs as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities; Level 2 – Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly; Level 3 – Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability. The Company’s financial instruments, in addition to those presented in Note 5, Long-Term Debt, and Note 6, Fair Value Measurement, include cash and cash equivalents, the Australian research and development credit, accounts payable and accrued liabilities. Management believes that the carrying amounts of cash and cash equivalents, the Australian research and development credit, accounts payable and accrued expenses approximate the fair value due to the short-term nature of those instruments. Cash and Cash Equivalents Cash and cash equivalents are defined as cash in banks and investment instruments having maturities of three months or less from their acquisition date. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents are valued at cost, which approximates their fair value. Foreign Currency Due to the growing volume of research contracts and intercompany loans that are now being exclusively denominated in local currency, effective August 1, 2018, the functional currency of the Company’s Australian subsidiary was changed from the U.S. dollar to the Australian dollar. The impact of the change in functional currency was not material to the audited consolidated financial statements for the year ended December 31, 2018. As a result of the change in functional currency, the financial position and results of operations of the Company's Australian subsidiary are measured using the foreign subsidiary's local currency. Revenues and expenses of the Australian subsidiary have been translated into U.S. dollars at average exchange rates prevailing during the period from January 1, through March 31, 2019. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting translation gain and loss adjustments are recorded directly as a separate component of stockholders’ equity . Reclassifications Certain prior year amounts have been reclassified to conform to the 2019 presentation.

Accrued Expenses

Accrued Expenses	3 Months Ended
	Mar. 31, 2019
Text Block [Abstract]
Accrued Expenses	3. Accrued Expenses Accrued expenses are as follows: December 31, March 31, 2018 2019 Accrued research and development $ 3,481,570 $ 4,702,232 Accrued payroll liabilities 269,046 1,777,244 Other 1,352,386 863,125 Total $ 5,103,002 $ 7,342,601

Development Derivative Liabilit

Development Derivative Liability	3 Months Ended
	Mar. 31, 2019
Research And Development [Abstract]
Development Derivative Liability	4. Development Derivative Liability On February 28, 2019, the Company entered into the SFJ Agreement under which SFJ agreed to provide funding to the Company to support the development of APL-2 for the treatment of patients with PNH. Pursuant to the agreement, SFJ paid the Company $60.0 million following the signing of the agreement, and agreed to pay the Company up to an additional $60.0 million in the aggregate in three equal installments upon the achievement of specified development milestones with respect to the Company’s Phase 3 program for APL-2 in PNH and subject to the Company having cash resources at the time sufficient to fund at least 10 months of the Company’s operations. The Company expects that those milestones will occur during 2019. In addition, upon the mutual agreement of the Company and SFJ, at any time after the earlier of the date that the Company has reviewed the primary endpoint data from its PEGASUS Phase 3 trial of APL-2 in patients with PNH and March 31, 2020, SFJ may fund an additional $50.0 million of the Company’s development costs (the “Additional SFJ Funding”). Following regulatory approval by the FDA or the European Medicines Agency (“EMA”) for the use of APL-2 as a treatment for PNH the Company will be obligated to pay SFJ an initial payment of $2.5 million (or a total of $5 million if regulatory approval is granted by the FDA and the EMA) and then an additional $192.5 million in the aggregate (or $385 million if regulatory approval is granted by the FDA and the EMA) in six additional annual payments with the majority of the payments being made from the third anniversary to the sixth anniversary of regulatory approval. Such payments will be proportionately adjusted in the event that the actual funding from SFJ is lower or greater than $120 million (including as a result of the payment of the Additional SFJ Funding). Additionally, the Company granted a security interest in all of its assets, excluding intellectual property and license agreements to which it is a party. In connection with the grant of the security interest, the Company agreed to certain affirmative and negative covenants, including restrictions on its ability to pay dividends, incur additional debt or enter into licensing transactions with respect to its intellectual property, other than specified types of licenses. The SFJ Agreement is presented as a derivative liability on the balance sheet as of March 31, 2019. The liability was initially recorded at the value of the aggregate cash received pursuant to the contractual terms, which was determined to have been fair value, and subsequently remeasured at the end of the fiscal quarter as a level 3 derivative, with the change in fair value of $736,000 recorded in loss from remeasurement of development derivative liability on the income statement. The derivative is valued using a scenario-based discounted cash flow method, whereby each scenario makes assumptions about the probability and timing of cash flows, and such cash flows are present valued using a risk-adjusted discount rate. The analysis is calibrated such that the value of the derivative as of the date of the SFJ Agreement was consistent with an arm’s-length transaction. Key inputs to the level 3 fair value model include (i) the probability and timing of achieving stated development goals to receive the next tranche of funding, (ii) the probability and timing of achieving FDA and EMA approval, (iii) SFJ’s cost of borrowing (8.00%), and (iv) the Company’s cost of borrowing (16.16%). SFJ’s implied cost of borrowing was 8.00% and the Company’s implied cost of borrowing was 16.16.% as of the reporting date. These implied costs of borrowing were determined assuming the SFJ Agreement was initially executed with arm’s-length terms. If the SFJ Agreement was instead not determined to be an arm’s-length transaction, then implied discount rates could differ.

Long-term Debt

Long-term Debt	3 Months Ended
	Mar. 31, 2019
Debt Disclosure [Abstract]
Long-term Debt	5. Long-term Debt Term Loan Facility On October 20, 2017, the Company entered into a loan and security agreement with Silicon Valley Bank (“SVB”) to provide for a $20.0 million term loan facility (the “term loan facility”). Borrowings under the term loan facility accrued interest at a floating rate per annum equal to the WSJ prime rate plus 1.50%. Under the agreement, the Company was required to make monthly interest-only payments through November 1, 2019 and was required to make 24 equal monthly payments of principal, plus accrued interest, from November 1, 2019 through October 1, 2021, when all unpaid principal and interest became due and payable. On March 26, 2019, the Company voluntarily repaid all outstanding amounts due and owed, including applicable termination fees, under the term loan facility. The final payment of $21,802,403 totaled per diem interest of $101,111 and $21,701,292 for the outstanding balance of the term loan which included (i) a final payment equal to 8% of the original principal amount of the term loan of $1,600,000, and (ii) a prepayment fee contractually owed of $100,000 plus other fees of $1,292 which resulted in a total loss on extinguishment of debt of $1,208,132. In connection with the Company’s entry into the term loan facility, the Company issued to SVB a warrant to purchase 14,064 shares of the Company’s common stock with an exercise price per share of $5.484. The warrant has a ten-year term and includes a put option pursuant to which, in the event of an acquisition, change in control or dissolution or winding up of the Company, or the expiration of the warrant, SVB may require the Company to repurchase the warrant for a total aggregate purchase price of $250,000. Related Party Promissory Note On October 19, 2017, the Company issued and sold an unsecured promissory note in the principal amount of $7.0 million to Golda Darty Partners S.A. (“GDP”), an affiliate of one of the Company’s stockholders. The promissory note accrues interest at a rate per annum of 8.0%, and is due and payable quarterly in arrears on the 19th day of each April, July, October and January. The promissory note has a maturity date of October 19, 2022 when the $7,000,000 is due and payable in its entirety. The promissory note is contractually subordinated to the Company’s obligations to SFJ under the SFJ Agreement. In connection with the issuance and sale of the above promissory note, the Company issued to GDP a warrant to purchase 93,764 shares of the Company’s common stock at a price per share of $5.484, which was exercised in whole in October 2017. The Company recorded the fair value of the warrant in the aggregate amount of $430,160 as a discount to the promissory note. This amount is being accreted as additional interest expense over the term of the promissory note.

Leases

Leases	3 Months Ended
	Mar. 31, 2019
Leases [Abstract]
Leases	6. Leases On January 1, 2019, The Company adopted ASU 2016-02 Leases (Topic 842) using a modified retrospective method. The Company recognized $5.5 million of lease assets and liabilities. There was no impact to retained earnings upon adoption of Topic 842. The underlying assets of the Company’s leases primarily relate to office space leases, but also include some equipment leases. The Company determines if an arrangement qualifies as a lease at its inception. As a practical expedient permitted under Topic 842, the Company has elected to account for the lease and non-lease components as a single lease component for all leases of which it is the lessee. Lease payments, which may include lease and non-lease components, are included in the measurement of the Company’s lease liabilities to the extent that such payments are either fixed amounts or variable amounts that depend on a rate or index as stipulated in the lease contract. When the Company cannot readily determine the rate implicit in the lease, the Company determines its incremental borrowing rate by using the rate of interest that it would have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. The Company enters into lease agreements with terms generally ranging from 2-7 years. Some of the Company’s lease agreements include Company options to extend the lease on a month to month basis or for set periods for up to 5 years. options to terminate the leases within 1 year or per other contractual terms. As of March 31, 2019, all leases were classified as operating lease assets and liabilities. Operating lease assets were $6.6 million and operating lease liabilities were $6.7 million at March 31, 2019. At March 31, 2019, the weighted average remaining lease term of operating leases was 5.29 years and the weighted average discount rate used to measure the outstanding operating lease liabilities leases was 8.54%. For the three months ended March 31, 2019, the total lease cost for operating lease expense was: $403,542. Supplemental cash flow information related to operating leases for the three months ended March 31, 2019 is as follows: Operating cash flows from operating leases $330,816 Right of use assets obtained in exchange for lease obligations $6,940,332 The maturity of the Company’s operating lease liabilities as of March 31, 2019 are as follows: 2019 $1,154,778 2020 1,691,742 2021 1,320,200 2022 1,353,133 2023 and thereafter 2,829,649 Total future minimum lease payments 8,349,502 Less imputed interest (1,654,971) Total operating lease liabilities $6,694,531 Comparative disclosures under ASC 840: Rental expense under operating leases totaled $136,215 for the three months ended March 31, 2018. As previously disclosed in our 2018 Annual Report on Form 10-K and under the previous lease accounting standard, ASC 840, Leases, 2019 $1,251,720 2020 1,292,025 2021 975,750 2022 998,350 2023 and thereafter 2,341,219 $6,859,064

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2019
Fair Value Disclosures [Abstract]
Fair Value Measurements	7 . Fair Value Measurements The fair value of the following financial instruments are based on level 2 inputs. As of December 31, 2018 and March 31, 2019, the fair value of the Company's promissory note was approximately $7.4 million, based on discounted cash flows, market-based expectations for interest rates, credit risk and the contractual terms of the debt instrument. The term loan facility paid interest at a variable interest rate and accordingly the carrying amount approximated fair value at December 31, 2018. The fair value of the SFJ Agreement is presented as a derivative liability based on level 3 inputs. The derivative is valued using a scenario-based discounted cash flow method, whereby each scenario makes assumptions about the probability and timing of cash flows, and such cash flows are present valued using a risk-adjusted discount rate. The analysis is calibrated such that the value of the derivative as of the date of the SFJ Agreement was consistent with an arm’s-length transaction. Key inputs to the level 3 fair value model include (i) the probability and timing of achieving stated development goals to receive the next tranche of funding, (ii) the probability and timing of achieving FDA and EMA approval, (iii) SFJ’s cost of borrowing (8.00%), and (iv) the Company’s cost of borrowing (16.16%). SFJ’s implied cost of borrowing was 8.00% and the Company’s implied cost of borrowing was 16.16% as of the reporting date. These implied costs of borrowing were determined assuming the SFJ Agreement was initially executed with arm’s-length terms. If the SFJ Agreement was instead not determined to be an arm’s-length transaction, then implied discount rates could differ.

Refundable Research and Develop

Refundable Research and Development Credit and Income Taxes	3 Months Ended
	Mar. 31, 2019
Text Block [Abstract]
Refundable Research And Development Credit And Income Taxes	8. Refundable Research and Development Credit and Income Taxes The Company earns non-income related refundable Australian research and development credits that are settled and paid to the Company annually. The associated income from the credits are an offset to research and development expenses. The Company’s income tax provision is computed based on the federal statutory rate and the average state statutory rates, net of the related federal benefit. For the three months ended March 31, 2019 and 2018, there were no current or deferred income tax expenses or benefits due to the Company’s net losses, research and development credits and increases in its deferred tax asset valuation allowance during those periods. The Company’s estimate of the realizability of the deferred tax asset is dependent on estimates of projected future levels of taxable income. In analyzing future taxable income levels, the Company considered all evidence currently available, both positive and negative. Based on this analysis, the Company has recorded a valuation allowance for all deferred tax assets as of March 31, 2019.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2019
Commitments And Contingencies Disclosure [Abstract]
Commitments and Contingencies	9. Commitments and Contingencies The Company contracts to conduct research and development activities with third parties. The scope of the services under the research and development contracts can be modified and the contracts cancelled by the Company upon written notice. In some instances, the contracts may be cancelled by the third party upon written notice. If the Company were to cancel these contracts as of March 31, 2019, the Company would be required to pay certain termination costs and other fees of approximately $1,768,400 that would be incurred in future periods. The Company also has certain payment and other obligations under the SFJ Agreement, which are discussed above in Note 4.

Net Loss per Share

Net Loss per Share	3 Months Ended
	Mar. 31, 2019
Earnings Per Share [Abstract]
Net Loss per Share	10. Net Loss per Share Since the Company was in a loss position for all periods presented, basic net loss per common share is the same as diluted net loss per common share for all periods presented as the inclusion of all potential common shares outstanding would have been anti-dilutive. Shares outstanding presented below were excluded from the calculation of diluted net loss per share, prior to the use of the treasury stock method, as their effect is anti-dilutive: For the Three Months Ended March 31, 2018 2019 Common stock options 7,418,316 9,191,033 Common stock warrants 14,064 14,064 Total 7,432,380 9,205,097

Related Party Transaction

Related Party Transaction	3 Months Ended
	Mar. 31, 2019
Related Party Transactions [Abstract]
Related Party Transaction	11. Related Party Transaction Effective as of May 1, 2018, the Company entered into a subscription license agreement and a services agreement with Revon Systems, Inc. (“Revon”). Under the subscription license agreement, Revon granted the Company an exclusive license to use the Revon software platform and applications for any purpose with respect to the Company's programs in age-related macular degeneration, hemolytic diseases and complement-dependent nephropathies for an annual license fee of $175,000 and an option to obtain a perpetual, exclusive license thereafter for $350,000. Under the services agreement, Revon will provide development services with respect to the Revon software to the Company for $250,000 during the first year. Each of Cedric Francois, the Company’s chief executive officer, Pascal Deschatelets, the Company’s chief operating officer, and Alec Machiels, a member of the board of directors, is an affiliate of Revon. The Board approved the Revon agreements after review by a subcommittee of the disinterested members of the Board and determination by the full Board that the terms of the Revon agreements were fair, reasonable and in the best interests of the Company.

Summary of Significant Accounti

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Apellis Australia Pty Ltd, Apellis Ireland Ltd and Apellis Switzerland GmbH. All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and following the requirements of the Securities and Exchange Commission (the “SEC”), for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP have been condensed or omitted and, accordingly, the balance sheet as of December 31, 2018 has been derived from audited consolidated financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements. These financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of the Company’s financial information. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any other interim period or for any other future year. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2019.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The Company is required to disclose information on the fair value of financial instruments and inputs that enable an assessment of the fair value. The three levels of the fair value hierarchy prioritize valuation inputs based upon the observable nature of those inputs as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities; Level 2 – Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly; Level 3 – Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability. The Company’s financial instruments, in addition to those presented in Note 5, Long-Term Debt, and Note 6, Fair Value Measurement, include cash and cash equivalents, the Australian research and development credit, accounts payable and accrued liabilities. Management believes that the carrying amounts of cash and cash equivalents, the Australian research and development credit, accounts payable and accrued expenses approximate the fair value due to the short-term nature of those instruments.
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents are defined as cash in banks and investment instruments having maturities of three months or less from their acquisition date. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents are valued at cost, which approximates their fair value.
Foreign Currency	Foreign Currency Due to the growing volume of research contracts and intercompany loans that are now being exclusively denominated in local currency, effective August 1, 2018, the functional currency of the Company’s Australian subsidiary was changed from the U.S. dollar to the Australian dollar. The impact of the change in functional currency was not material to the audited consolidated financial statements for the year ended December 31, 2018. As a result of the change in functional currency, the financial position and results of operations of the Company's Australian subsidiary are measured using the foreign subsidiary's local currency. Revenues and expenses of the Australian subsidiary have been translated into U.S. dollars at average exchange rates prevailing during the period from January 1, through March 31, 2019. Assets and liabilities have been translated at the rates of exchange on the balance sheet date. The resulting translation gain and loss adjustments are recorded directly as a separate component of stockholders’ equity .
Reclassifications	Reclassifications Certain prior year amounts have been reclassified to conform to the 2019 presentation.

Accrued Expenses (Tables)

Accrued Expenses (Tables)	3 Months Ended
	Mar. 31, 2019
Text Block [Abstract]
Schedule of Accrued Expenses	Accrued expenses are as follows: December 31, March 31, 2018 2019 Accrued research and development $ 3,481,570 $ 4,702,232 Accrued payroll liabilities 269,046 1,777,244 Other 1,352,386 863,125 Total $ 5,103,002 $ 7,342,601

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2019
Leases [Abstract]
Supplemental Cash Flow Information Related to Operating Leases	Supplemental cash flow information related to operating leases for the three months ended March 31, 2019 is as follows: Operating cash flows from operating leases $330,816 Right of use assets obtained in exchange for lease obligations $6,940,332
Maturity of Operating Lease Liabilities	The maturity of the Company’s operating lease liabilities as of March 31, 2019 are as follows: 2019 $1,154,778 2020 1,691,742 2021 1,320,200 2022 1,353,133 2023 and thereafter 2,829,649 Total future minimum lease payments 8,349,502 Less imputed interest (1,654,971) Total operating lease liabilities $6,694,531
Schedule of Future Minimum Rental Payments for Lease Obligations	Future minimum rental payments for lease obligations with initial terms in excess of one year as of December 31, 2018 were as follows: 2019 $1,251,720 2020 1,292,025 2021 975,750 2022 998,350 2023 and thereafter 2,341,219 $6,859,064

Net Loss per Share (Tables)

Net Loss per Share (Tables)	3 Months Ended
	Mar. 31, 2019
Earnings Per Share [Abstract]
Summary of Shares Outstanding that were Excluded from Calculation of Diluted Net Loss Per Share	Shares outstanding presented below were excluded from the calculation of diluted net loss per share, prior to the use of the treasury stock method, as their effect is anti-dilutive: For the Three Months Ended March 31, 2018 2019 Common stock options 7,418,316 9,191,033 Common stock warrants 14,064 14,064 Total 7,432,380 9,205,097

Nature of Organization and Op_2

Nature of Organization and Operations - Additional Information (Detail)	Mar. 31, 2020USD ($)	Mar. 11, 2019USD ($)$ / sharesshares	Feb. 28, 2019USD ($)Installment	Apr. 23, 2018USD ($)$ / sharesshares	Mar. 31, 2019USD ($)	Dec. 31, 2018USD ($)
Nature of Organization and Operations [Line Items]
Proceeds from follow-on public offering after deducting underwriting discounts and commissions					$ 110,262,000
Cash and cash equivalents					$ 288,246,706	$ 176,267,666
Follow-on Public Offering [Member]
Nature of Organization and Operations [Line Items]
Issuance of common stock in follow-on offering, shares | shares		6,900,000		5,500,000
Price of common stock | $ / shares		$ 17		$ 25.50
Proceeds from follow-on public offering after deducting underwriting discounts and commissions		$ 109,600,000		$ 131,200,000
Underwriting discounts and commissions		7,000,000		8,400,000
Offering Cost		$ 700,000		$ 500,000
SFJ Agreement
Nature of Organization and Operations [Line Items]
Proceeds from SFJ agreement			$ 60,000,000
Additional funding amount upon achievement of development milestones			$ 60,000,000
Number of milestone payments | Installment			3
Development funding for minimum period of operating expense			10 months
SFJ Agreement | ScenarioForecast
Nature of Organization and Operations [Line Items]
Additional funding for development costs	$ 50,000,000

Accrued Expenses - Schedule of

Accrued Expenses - Schedule of Accrued Expenses (Detail) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Accrued Liabilities Current [Abstract]
Accrued research and development	$ 4,702,232	$ 3,481,570
Accrued payroll liabilities	1,777,244	269,046
Other	863,125	1,352,386
Total	$ 7,342,601	$ 5,103,002

Development Derivative Liabil_2

Development Derivative Liability - Additional Information (Details)	Mar. 31, 2020USD ($)	Feb. 28, 2019USD ($)Installment	Mar. 31, 2019USD ($)
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Loss from remeasurement of development derivative liability			$ 736,000
Level 3 [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Implied cost of borrowing discount rates			16.16%
SFJ Agreement
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Proceeds from SFJ agreement		$ 60,000,000
Additional funding amount upon achievement of development milestones		$ 60,000,000
Number of milestone payments | Installment		3
Development funding for minimum period of operating expense		10 months
Obligated to pay initial payment		$ 2,500,000
Aggregate amount of additional annual payments		$ 192,500,000
Number of additional annual payments | Installment		6
Minimum payment of additional funding amount		$ 120,000,000
Loss from remeasurement of development derivative liability			$ 736,000
SFJ Agreement | Level 3 [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Implied cost of borrowing discount rates			8.00%
SFJ Agreement | Regulatory Approval Granted by FDA and EMA
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Obligated to pay initial payment		5,000,000
Aggregate amount of additional annual payments		$ 385,000,000
SFJ Agreement | ScenarioForecast
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Additional funding for development costs	$ 50,000,000

Long-term Debt - Additional Inf

Long-term Debt - Additional Information (Detail)	Mar. 26, 2019USD ($)	Oct. 20, 2017USD ($)Installment$ / sharesshares	Oct. 19, 2017USD ($)$ / sharesshares	Mar. 31, 2019USD ($)
Debt Instrument [Line Items]
Loss on extinguishment of debt				$ 1,208,132
Unsecured Promissory Note | Golda Darty Partners S A [Member]
Debt Instrument [Line Items]
Debt instrument, due and payment description				The promissory note accrues interest at a rate per annum of 8.0%, and is due and payable quarterly in arrears on the 19th day of each April, July, October and January.
Principal amount			$ 7,000,000
Warrant to purchase common stock | shares			93,764
Exercise price per share | $ / shares			$ 5.484
Accrued interest rate			8.00%
Maturity date			Oct. 19, 2022
Long-term debt			$ 7,000,000
Fair value of warrant			$ 430,160
Term Loan Facility [Member]
Debt Instrument [Line Items]
Final payment due amount	$ 21,802,403
Debt instrument per diem interest amount	101,111
Principal amount	$ 21,701,292
Final payment percentage equal to original principal amount	8.00%
Final payment towards original principal amount	$ 1,600,000
Prepayment fee	100,000
Other fees	1,292
Loss on extinguishment of debt	$ 1,208,132
Silicon Valley Bank [Member] | Term Loan Facility [Member]
Debt Instrument [Line Items]
Warrant to purchase common stock | shares		14,064
Exercise price per share | $ / shares		$ 5.484
Warrant term		10 years
Aggregate purchase price		$ 250,000
Loan and Security Agreement [Member] | Silicon Valley Bank [Member]
Debt Instrument [Line Items]
Term loan facility		$ 20,000,000
Debt instrument, due and payment description				The Company was required to make monthly interest-only payments through November 1, 2019 and was required to make 24 equal monthly payments of principal, plus accrued interest, from November 1, 2019 through October 1, 2021, when all unpaid principal and interest became due and payable.
Loan and Security Agreement [Member] | Silicon Valley Bank [Member] | Convertible Preferred Stock [Member]
Debt Instrument [Line Items]
Debt instrument, number of equal monthly installments | Installment		24
Loan and Security Agreement [Member] | Silicon Valley Bank [Member] | Prime Rate [Member]
Debt Instrument [Line Items]
Interest bear rate		1.50%

Leases - Additional Information

Leases - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Jan. 01, 2019
Lessee Lease Description [Line Items]
Operating lease asset	$ 6,600,000
Operating lease liability	$ 6,694,531
Operating lease description	The Company enters into lease agreements with terms generally ranging from 2-7 years. Some of the Company’s lease agreements include Company options to extend the lease on a month to month basis or for set periods for up to 5 years. Many leases also include options to terminate the leases within 1 year or per other contractual terms. Renewal and termination options were generally not included in the lease term for the Company’s existing operating leases
Operating lease, existence of option to extend	true
Operating lease maximum term of options to terminate lease	1 year
Weighted average remaining lease term of operating leases	5 years 3 months 14 days
Weighted average discount rate used to measure outstanding operating lease liabilities leases	8.54%
Operating lease expense	$ 403,542
Rental expense under operating leases		$ 136,215
Minimum [Member]
Lessee Lease Description [Line Items]
Operating lease, term of contract	2 years
Maximum [Member]
Lessee Lease Description [Line Items]
Operating lease, term of contract	7 years
Operating lease options to extend lease	5 years
ASU 2016-02 [Member]
Lessee Lease Description [Line Items]
Operating lease asset			$ 5,500,000
Operating lease liability			$ 5,500,000

Leases - Supplemental Cash Flow

Leases - Supplemental Cash Flow Information Related to Operating Leases (Detail)	3 Months Ended
	Mar. 31, 2019USD ($)
Leases [Abstract]
Operating cash flows from operating leases	$ 330,816
Right of use assets obtained in exchange for lease obligations	$ 6,940,332

Leases - Maturity of Operating

Leases - Maturity of Operating Lease Liabilities (Detail)	Mar. 31, 2019USD ($)
Leases [Abstract]
2019	$ 1,154,778
2020	1,691,742
2021	1,320,200
2022	1,353,133
2023 and thereafter	2,829,649
Total future minimum lease payments	8,349,502
Less imputed interest	(1,654,971)
Total operating lease liabilities	$ 6,694,531

Leases - Schedule of Future Min

Leases - Schedule of Future Minimum Rental Payments for Lease Obligations (Detail)	Dec. 31, 2018USD ($)
Leases [Abstract]
2019	$ 1,251,720
2020	1,292,025
2021	975,750
2022	998,350
2023 and thereafter	2,341,219
Total	$ 6,859,064

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Level 2 [Member] | Promissory Note [Member]
Cash And Cash Equivalents [Line Items]
Long-term Debt	$ 7.4	$ 7.4
Level 3 [Member]
Cash And Cash Equivalents [Line Items]
Percentage of cost of borrowing	16.16%
Level 3 [Member] | SFJ Agreement
Cash And Cash Equivalents [Line Items]
Percentage of cost of borrowing	8.00%

Refundable Research and Devel_2

Refundable Research and Development Credit and Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Tax Expense Benefit Continuing Operations [Abstract]
Current income tax expense or benefits	$ 0	$ 0
Deferred income tax expense or benefits	$ 0	$ 0

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Detail)	Mar. 31, 2019USD ($)
Commitments And Contingencies Disclosure [Abstract]
Estimated termination costs and other fees	$ 1,768,400

Net Loss per Share - Summary of

Net Loss per Share - Summary of Shares Outstanding that were Excluded from Calculation of Diluted Net Loss Per Share (Detail) - shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	9,205,097	7,432,380
Common Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	9,191,033	7,418,316
Common Stock Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	14,064	14,064

Related Party Transaction - Add

Related Party Transaction - Additional Information (Detail) - Revon [Member] - License Agreement and Services Agreement [Member]	May 01, 2018USD ($)
Related Party Transaction [Line Items]
Annual license fee	$ 175,000
Exclusive license option, thereafter	350,000
Development service costs	$ 250,000