Sometimes the market just doesn't see what's happening right in front of it. That's the argument Bank of America is making about Apellis Pharmaceuticals Inc. (APLS), which just got upgraded to Buy based on what analyst Tazeen Ahmad calls an underappreciated opportunity in rare kidney diseases.

The story centers on Empaveli, a drug that landed FDA approval in July 2025 as the first treatment for C3 glomerulopathy (C3G) and primary immune complex membranoproliferative glomerulonephritis (IC-MPGN) in patients 12 and older. These are rare kidney conditions where reducing proteinuria matters a lot to patients, and until now, they've had no approved options. Empaveli is also already on the market for adults with paroxysmal nocturnal hemoglobinuria (PNH) in the U.S.

The Numbers Tell a Promising Story

Here's what caught BofA's attention: Since late July, Apellis has recorded 267 new patient start forms for Empaveli in C3G/IC-MPGN. That works out to roughly 5% penetration of an estimated 5,000-patient U.S. market, and we're only a few months in. For context, Apellis reported $27 million in U.S. net product revenue for Empaveli in the third quarter.

What's equally encouraging is the payer response. Management noted they haven't seen any full coverage denials so far, which is pretty remarkable for a newly approved rare disease treatment. Payers can be tough gatekeepers, so early traction here suggests the clinical case is compelling.

Why Empaveli Might Win This Market

Apellis has some advantages working in its favor. The drug's label is broader than you might expect, covering IC-MPGN patients, pediatric cases, and even post-transplant patients. The company also believes Empaveli delivers stronger efficacy than Novartis AG (NVS) Fabhalta (iptacopan), which competes in this space.

Bank of America is modeling $508 million in peak U.S. sales for this indication by 2033, assuming 20% market penetration. That alone adds $10 per share to their price target of $28. The upgrade from Neutral to Buy reflects confidence that the Empaveli launch momentum in C3G could deliver upside beyond current Street estimates.

The Syfovre Situation and What Comes Next

There's another piece to this puzzle. Apellis also markets Syfovre for geographic atrophy (GA), but 2025 was a tough year for that drug after it lost access to charitable foundation funding. That's a real headwind when patients rely on assistance programs to afford treatment.

The company expects modest growth in 2026, but the real catalyst could arrive with a prefilled syringe version of Syfovre. Apellis plans to file for approval in the first half of 2026, and BofA thinks this could be a game-changer. Prefilled syringes make administration easier for physicians, which could help Apellis grab market share and potentially expand the overall GA treatment market. The analyst expects the prefilled syringe impact to show up in 2027, and any signs of renewed momentum would represent upside to estimates. Syfovre currently contributes $16 per share to BofA's price forecast.

The broader point here is that Apellis has two shots on goal, and the market seems focused on the near-term Syfovre challenges while missing the Empaveli kidney disease opportunity that's unfolding right now. Early commercial execution has been solid, the label is competitive, and payer acceptance is better than expected. Whether that translates into sustained growth remains to be seen, but Bank of America clearly thinks the risk-reward has shifted in investors' favor.

APLS Price Action: Apellis Pharmaceuticals shares were up 2.37% at $21.52 at the time of publication on Wednesday.