Apellis Pharmaceuticals (APLS) has had a difficult Q1 as charitable foundation funding gaps and weaker-than-expected Syfovre sales weigh on the outlook, BofA Securities said in a report e-mailed Friday.

Sales for Syfovre, a treatment for geographic atrophy, fell 22% in Q1 to $130.2 million, missing estimates, as Apellis cited reduced foundation support and withheld guidance pending further review, BofA said.

While Syfovre showed 4% underlying demand growth and gained patient share, analysts at BofA now model $1 billion in peak sales, down from $2 billion, the report said.

"We are more cautious on the size of the GA market opportunity based on our recent doctor checks and think more consistent signs of robust uptake are needed for long-term growth confidence," BofA said.

Meanwhile, Apellis is banking on its renal pipeline, particularly Empaveli for Complement 3 Glomerulopathy and Immune Complex-Mediated Membranoproliferative Glomerulonephritis, both rare kidney diseases, with a regulatory decision expected July 28.

Management estimates the US and EU market includes 5,000 to 8,000 patients and anticipates a broader label than rival Fabhalta. Analysts project $400 million in peak US sales, with Empaveli seen as a key near-term growth driver.

BofA downgraded the stock to neutral from buy, while also lowering the company's price target to $23 from $41.

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