Coherus BioSciences Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
November 6, 2023

There are 12 speakers on the call.

Operator

Good day and thank you for standing by. Welcome to the Coherus Biosciences Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded.

Operator

I would now like to hand the conference over to your speaker today, Jamie Taylor, Head of Investor Relations. Please go ahead.

Speaker 1

Good afternoon, everyone, and thank you for joining us. I am Jamie Taylor, Coherus' new Head of Investor Relations. I'm happy to be with you today. We issued a press release earlier today announcing our financial results for the Q3 of 2023. This release can be found on the Cokeris Biosciences website and is also attached to the Form 8 ks that we filed with the SEC today.

Speaker 1

Today's call includes forward looking statements regarding Cokeris' Current expectations about future events. These statements include, but are not limited to, our ability to gain approval for multiple new products and launch them, projections of expenses and revenue, projections of future market share or demand for any product, Our expectations for market opportunity and the timing of our return to be cash flow positive. All of these forward looking statements involve substantial risks and uncertainties that are beyond our control and could cause actual results, performance or achievements to differ from those implied by the forward looking statements. These statements are not guarantees of future performance and are subject to substantial risks and uncertainties that are discussed in our press release that we issued today as well as the documents that we file with the SEC. Forward looking statements provided on the call today are made as of this date, and we undertake no duty to update or revise any forward looking statements.

Speaker 1

3rd quarter 2023 results are not necessarily indicative of results for future periods. With me on today's call are Denny Lamgier, CEO of Coherus Doctor. Teresa Lavalley, Chief Development Officer Doctor. Rosh Daya, Chief Medical Officer Paul Reeder, Chief Commercial Officer and McDavid Stilwell, Chief Financial Officer. I'll now turn the call over to Debbie.

Speaker 2

Thank you, Jamie, and welcome to the team. And thank you all for joining us today on our Q3 2023 earnings call. We continue to make good progress on our overarching strategy. Bloctorazine, our PD-one inhibitor is now approved. The surface oncology acquisition is now completed, providing us a competitively positioned development program focused on the tumor microenvironment.

Speaker 2

Similarly, our Lucentis biosimilar after garnering its Q code continues to gain share in sales Our UDENYCA franchise has returned to growth. However, even as we progress on the overarching strategy, We are cognizant that our revenues and our expenses must come into alignment. Progress has been made here also. This quarter saw a 27% increase in revenues over last quarter to 74,600,000 representing a 64% quarterly increase year over year, while year to date SG and A plus expenses was reduced by some 30% from the same period last year. So while we plan to expand LYCTORZA utilization beyond NPC By developing it in combination with other synergistic therapeutics, including our own, this internal development will be constrained until mid-twenty 24 as we continue to reduce expenses and seek profitability.

Speaker 2

And while we plan to enter into partnerships with other companies interested in combining their novel assets with Lantorzi or our TME assets. We do not foresee sharing clinical development costs, which would increase our R and D expenses. So even as revenues increase from the growing number of commercial products, Across the board, we will seek opportunities to constrain and reduce expenses as we pursue profitability. With that, I'll hand the call over to Paul Reeder, our Chief Commercial Officer. Paul?

Speaker 2

Thanks, Denny, and good afternoon, everyone. As a commercial organization,

Speaker 3

we remain in launch mode with Simerli, UDENYCA Auto Injector and Ucimri And are prepared to launch 2 new products in the Q1 next year, Octorzi, which was approved last month and the UDENYCA On Body Injector following FDA potential approval. This will bring our total number of marketed assets from 1 to 6 over an 18 month time period and will drive top line revenue growth over the coming years. For the Q3, combined net product revenue was $74,400,000 an increase of 27% over Q2. I'll now speak to each brand and we'll start with Simerli for biosimilar to Lucentis. Our strategic approach to the retina market is first, to maximize the conversion of existing Lucentis business and second, to grow share through new patient starts and the conversion from other anti VEGF products.

Speaker 3

Execution against this plan remains strong as we report net sales in Q3 of $40,000,000 an increase of 50% quarter over quarter driven by strong demand. Similarly, market share within the ranibizumab class was 28.6%, an increase 11.6 market share points quarter over quarter. We also announced that similarly passed a major milestone where in the 1st year of launch, We sold over 100,000 doses to retinal specialists, which reinforces the retinal community's receptivity Biosimilars and a desire for a safe and effective biosimilar option to Lucentis. In summary, Total 2023 net sales for Zimmerli through Q3 were $73,000,000 So we reaffirm guidance And similarly, net sales will exceed $100,000,000 for 2023. Now on to UDENYCA.

Speaker 3

Stated previously, our strategy has been to fortify our base prefilled syringe business, while making price and share trade offs In order to maintain a competitive ASP in advance of the launches of both the auto injector and on body presentations respectively, We guided that UDENYCA demand and market share will return to growth this year. Based on our strong execution of this plan, I'm pleased to now report 2 consecutive quarters of UDENYCA revenue and market share growth. Q3 net sales were 33,000,000 an increase of 4% quarter over quarter, driven by increased demand, partially offset by lower net selling price. Market share grew to 16.5%, an increase of 4.3 market share points quarter over quarter. Both demand and market share gains were driven primarily from our core prefilled syringe presentation and occurred across all segments of the business.

Speaker 3

Also in the quarter, we launched the innovative UDENYCA auto injector and are working with accounts on how to best position and operationalize the auto injector within their respective clinical process throws. Since commercial launch, We've had over 300 accounts with the UDENYCA auto injector and are seeing a consistent flow of new account ordering every year. We expect increases in UDENYCA AutoCheckr demand as the launch progresses. Another positive development that occurred in the quarter is payer coverage, We significantly increased as both UDENYCA prefilled syringe and auto injector presentations were newly added onto a number of commercial and Medicare Advantage plans. Effective start dates of this expanded coverage vary It range from September 2023 to January 2024.

Speaker 3

But regardless of the start date, These contracts extend through calendar year 2024, significantly expanding UDENYCA's access going into next year. Regarding our novel UDENYCA On Body Device, we are awaiting FDA approval and will launch directly thereafter. UDENYCA is now a franchise and following the anticipated approval of UDENYCA On Body Injector will be the only Pegfilgrastim brand The 3 presentations offerings become in the total solution for oncology providers. This will enable us to compete directly with Glasta Onpro, which retains 42% of the market. Turning now to Ucimri, our biosimilar to HUMIRA.

Speaker 3

The high cost of adalimumab treatment remains a problem for the healthcare system and for many patients. Our patient centric strategy is to provide Ucimri at a single transparent low price. We launched Ucimri on July 3rd We're the innovators of the low list price strategy, launching at a list price of $9.95 per carton for 2 auto injectors, representing a discount of more than 85% to HUMIRA. As Part of our low list price strategy, we established partnerships with our Cubin cost plus drugs company and through its Team Cubin card at independent retailers We also signed an agreement with Superior Biologics, a specialty pharmacy who services more than 1,500,000 patients across the country. We will continue to pursue partnerships with organizations who look for low list price alternatives as we build our Ucimri business from the bottom up.

Speaker 3

In Q3, we sold 2,300 cartons of Ucimri, Generating net sales of $1,400,000 While the market formation period for biosimilar adalimumab is still in its early stages, HUMIRA retains formulary position for nearly all PBM, PBM and health plan formularies in 2023 and likely in 2024. Therefore, we expect slower growth for HUMIRA biosimilars through 2024 And then greater acceleration of biosimilar adalimumab adoption with the implementation of the Inflation Reduction Act in 2025. IRA will shift financial risk during the catastrophic phase of the benefit from the government to the Part D plans, which could affect how plants consider their formulary selections. Finally, let me reiterate our excitement about the approval and coming launch of LOCKTORZY, the first and only FDA approved treatment for patients diagnosed with relapsed or metastatic We've commenced launch activities and are working to ensure that patients and providers have access to BLOCTORZ As soon as product is in the channel, which we estimate to be in the early Q1 timeframe. Let me share with you now some more details about the MPC market Opportunity for Lactorsky.

Speaker 3

First, the NPC market. We estimate that approximately 2,000 relapsed metastatic NTC patients in the U. S. Are diagnosed each year. And the split is even between those in the first line versus second line plus.

Speaker 3

With Lactorsky's broad indication, we can access all of these patients and promote across all lines of therapy, including first line. 2nd, the prescriber base. NPC is fairly concentrated with approximately 2,200 oncologists Accounting for 80% of NPC treatment, 60% of the business is in the hospital setting, 40% is in the clinic. We know these doctors and our existing oncology team currently calls on all of the accounts for these doctors' practice. So the call points are highly efficient and synergistic with UDENYCA.

Speaker 3

3rd, the current treatment landscape for NTC. Claims data suggest that chemo only regimens are prescribed 60% of the time, which provides an immediate opportunity for Lactorsi. We'll target these treating physicians and position Lactorzi to be added to the existing chemo regimen irrespective of the line of treatment. And for the 40% where a combination of chemo and PD-one is used, we'll position Lactorsy as the preferred PD-one and the new standard of care regimen based on our approved indication and the totality of the evidence, which includes overall survival data. Finally, patient engagement.

Speaker 3

Through npcfax.com, we've enrolled a community of over 2,100 NPC patients are caregivers and will appropriately communicate branded information about bloktorzib, so they are informed and educated when speaking with their doctors about their individual treatment plans. Patients will also be supported through Lactorsi Solutions, our patient services hub It can be accessed via laktorzi.com. These are planned to go live next week. We look forward to updating you on our progress as the Lactorsi launch progresses. With that, I'll now hand it over to Teresa.

Speaker 1

Thank you, Paul, and good afternoon, everyone. I want to once again thank the FDA for acting so quickly to approve Bloktorzi following completion of the overseas inspection. With torapalumab approval now secured, We are continuing to collaborate with the FDA to complete their review of our final outstanding BLA for the UDENYCA On Body injector. As previously disclosed, the UDENYCA OBI supplement received a complete response letter from FDA on September 21, 2023 solely due to a 3rd party sellers inspection status. We are very pleased that our 3rd party manufacturer Sure.

Speaker 1

I was able to resolve this with urgency and we were able to resubmit the UDENYCAV OBI supplement to FDA in under 2 weeks. It is important to note only deficiency in the CRL from FDA with the 3rd party manufacturer indicating that clinical and manufacturing data were complete. Given there isn't any new information for FDA to review, we anticipate approval this year or Based on PDUFA, the review would be given a 6 month clock. However, the agency has communicated to us They expect to act significantly sooner. I will now briefly review the data from torapalumab In our other IO candidates, we recently presented at ESMO and SITC.

Speaker 1

LOCKTORZI is a next Generation PD-one inhibitor with a potent activation of T cells, including demonstrating significant activity in tumors that are less inflamed such as small cell lung cancer as was recently highlighted in oral presentation at ESMO. Coherent has presented our preclinical mechanism of action studies at the AACR EORTC NCI Triple Meeting And last week at the SITC conference comparing torapalumab to pembrolizumab, we demonstrated in multiple assays that torapalumab treatment resulted in statistically significantly higher T cell activation than pembrolizumab. Mormepalumab's Copency on T cell activation is consistent with a 12 fold higher binding affinity to PD-one than pembro. Additionally, the unique epitope of torapalumab at the FG Loop of the PD-one may also contribute to its higher potency. Lactorsi is the foundation of our IO franchise and we are excited to explore clinical opportunities to extend patient survival with novel combination, particularly with agents that target mechanisms of PD-one resistance due to immunosuppression in the tumor microenvironment.

Speaker 1

At the SITC conference last week, we also presented 2 additional posters characterizing anti cpr8 antibody. The CABDoso poster highlighted the interferon signaling like properties of IL-twenty seven Importantly describe biomarkers that may be useful for evaluating cancer patient treatment with causDozo. The CHS-one hundred and fourteen study support that preclinical treatment with an anti CCR8 antibody due to depletion of Treg cells in the tumor and conversion of cold tumors

Speaker 4

to hot.

Speaker 1

These data position us well for clinical development of both of these programs with Lactorsky. Our 3rd program targeting immune suppressive mechanisms in the tumor microenvironment is our CHS-one thousand anti ILT4 antibody program. We continue to progress our IND directed studies and plan to file the IND in the Q1 of 2024. I'll now turn the call over to Raj.

Speaker 5

Thank you, Theresa, and good afternoon, everyone. With the approval of LOCTORZY, we're delighted to be able to bring the 1st and only FDA approved treatment for nasopharyngeal carcinoma to patients in the U. S. Living with NTC across all lines of therapy. The approval in both first line patients with metastatic or recurrent locally advanced disease in combination with zuclatin and gensycobin and also as a single agent for patients with recurrent unresectable or metastatic disease progression after platinum containing chemotherapy marks a real step change in the treatment of these patients where up until now standard of care have generally been decades old chemotherapies.

Speaker 5

As a reminder, the approval is based on strong efficacy data from 2 well conducted studies, the data published in Nature Medicine and JCO and presented at both AACR and ASCO. Firstly, in JUPITER-two, opturidine in combination with chemotherapy in first line patients showed a hazard ratio of 0.52 for progression free survival and 0.63 for overall survival with benefits seen across all PD L1 expression levels with the results being both statistically significant as well as clinically meaningful. Secondly, in Polaris II, in second line and beyond, single agent LOCTORZY met its primary endpoint with an overall response rate of 20.5% and also demonstrated a median overall survival of 17.4 months. The adverse event profile in both trials demonstrated a safety profile, which was consistent with the drug class. Positive data sets across additional tumor types continue to demonstrate the consistency of effect of LOCTORITY.

Speaker 5

For example, at ASCO, the NEOTOCH data in the perioperative non small cell lung cancer space showed a statistically significant benefit favoring the toripalumab With a hazard ratio of 0.4 for event free survival, demonstrating the potential of toripalumab in earlier stage non small cell lung cancer. We're working with the FDA to explore potential avenues to bridge the data to the U. S. Also, at ESMO a few weeks ago, Positive data was reported for LOCTORITY in both renal cell carcinoma as well as small cell lung cancer. With additional rich data sets that have continued to emerge across several tumor sites this year, we continue to view LOCTORZY as a pivotal backbone for future combinations, in particular with other novel agents, and we continue to explore both internal combinations with our own pipeline agents as well as external partnerships for Lactorsy.

Speaker 5

Key to this is our acquisition of Surface Oncology, which, as Teresa mentioned, This provided us with 2 early stage assets, Cazdovo, 1st in class and only clinical stage IL-twenty seven and CHS-one hundred and fourteen, our CCRA. Firstly, with respect to CalSerta, as a reminder, this asset has shown monotherapy activity in Phase 1 studies in PD L1 refractory non small cell lung cancer and also combination activity with ativo and bev in hepatocellular carcinoma, data that was disclosed earlier this year. Updated data from these patients are anticipated to be presented in the coming months, both for non small cell lung cancer and hepatocellular carcinoma. We will be taking this early indication of activity forward with a Phase 1b combination study of Cardoso with tauripalamab, which is currently in start up and which we anticipate being active in the coming months. With respect to CHS-one hundred and fourteen, this asset is currently in the clinic in dose finding and we have safely proceeded through several dose levels without We will continue dose escalation before moving on to dose optimization and further studies in head and neck carcinoma, a tumor type where the disease linkage is strong.

Speaker 5

Regarding our TIGIT, our Phase IIIa study looking at the toripelumab TIGIT combination has The enrollment of its initial cohort of subjects in the U. S. With an acceptable safety profile. We will hold Further enrollment into this trial while we analyze the data from the ongoing patient pool and assess evolving data from competitive trials In order to be able to complete a robust portfolio prioritization, whilst at the same time continuing our clinical development efforts, LOPTOLZI in combination of Cazadoso and CHS-one hundred and fourteen together with continued development of our ILT4, which now gives us the opportunity to target not only the T cell with Octorzi, but also the tumor microenvironment in a potentially synergistic fashion. I'll now turn the call over to Mr.

Speaker 5

David.

Speaker 6

Thank you, Raj. I'll briefly review 3rd quarter results before discussing our updated 2023 guidance. As Paul detailed earlier, today we are reporting a 27% increase in net Sales across our 3 marketed products. Net revenue was $74,600,000 during the 3 months ended September 30, 2023, and included $33,000,000 of net sales of UDENYCA, dollars 40,000,000 of net sales of Zimmerli, dollars 1,400,000 of Ucimory net sales as well as approximately $200,000 in royalties we received from a license to our enalimumab formulation. Cost of goods sold for the 3 months ended September 30, 2023 was $32,700,000 and gross margin was 56%.

Speaker 6

Recall that UDENYCA COGS includes a mid single digit royalty on net sales payable through the first half of twenty twenty four. And similarly COGS includes a low to mid-fifty percent royalty on gross profits.

Speaker 3

We continue to focus

Speaker 6

on keeping tight control of our operating costs and research and development expense for the 3 months ended September 30, 2023, 2022 were $25,600,000 $45,800,000 respectively. The significant decline in R and D expense compared to the prior year quarter primarily resulted From the reduction in scope of the torapalumab collaboration agreement, the capitalization of certain use of the inventory in 2023 and were expensed as R and D prior to mid-twenty 22, as well as $5,200,000 in personnel and stock based compensation expense due to lower headcount. Selling, general and administrative expense increased by 3,400,000

Speaker 2

As compared to

Speaker 3

the year ago quarter to $48,200,000

Speaker 6

The increase was attributable to an increase in professional services fees of $4,700,000 driven by the Surface acquisition and third party processing fees for multiple products being commercialized, partially offset by a $1,900,000 reduction employee and consultant costs due to a lower average headcount as we continue to realize savings from the cost cutting program announced in March. As we launch new products, we are carefully controlling incremental spending to ensure the investment is appropriate for the opportunity and that we realize the efficiencies inherent in our portfolio. For example, our use of our strategy Is to build a business with customers attracted to our lowest price adalimumab offering and we have very low operating expenses associated with Ucimri. Foripamumab will be efficiently launched using the same commercial infrastructure marketing Utenica. As our product revenues increase and we continue to constrain operating expenses, we expect operating losses will continue to moderate.

Speaker 3

For the Q3 of 2023, we reported a lower net loss

Speaker 6

of $39,600,000 or $0.41 per share compared to a net loss of $86,700,000 or $1.11 per share for the same period in 2022. Cash, cash equivalents and investments in marketable securities were $131,000,000 as of September 30, 2023 compared to $192,000,000 at December 31, 2022. We are projecting continued sales growth and expect 4th quarter net sales of $85,000,000 to $95,000,000 For the full year 2023, we are reducing our earlier revenue guidance to a range of $250,000,000 to $260,000,000 primarily as a result of the delay in approval of UDENYCA On Body Injector, which we now expect to launch in the early part of 2024 following potential approval. We continue to tightly manage our expenses and we are today reducing our combined R and D, SG and A expense guidance from the earlier range of $315,000,000 to $335,000,000 to a new range of $300,000,000 to 310,000,000 including $40,000,000 to $45,000,000 of stock based compensation expense. This range also includes the addition of surface oncology Operating expenses since the closing of the acquisition in September and excludes any upfront or milestone collaboration payments for the closing costs of the Surface Oncology acquisition.

Speaker 6

Although we are not yet introducing revenue or expense guidance for 2024, We do expect lower expenses in 2024 compared to 2023 as well as continued growth in net product revenues as we continue to execute on our product launch plans. We are focused on ensuring the success of our commercial launches We will continue to maintain tight control over our operating expenses as we manage Coherus back

Speaker 3

to being cash flow positive over

Speaker 6

the course of 2024. I'll now hand the call to Denny for closing remarks prior

Speaker 2

to questions. Thank you, McDavid. O'Hieris is now one of the small number of IO companies with approved commercial stage PD-one inhibitor and a competitively positioned development program. We believe these are the 2 critical success factors for any company aspiring to be a leader in CIO. We're now a revenue generating oncology company with growing sales across a number of products.

Speaker 2

We have an increasingly diversified revenue base. We look forward to keeping you apprised of our progress. Operator, we're ready for the questions.

Operator

Thank you. Please stand by while we hold the Q and A roster. Our first question comes from the line of Robyn Karnauskas with Truist Securities, your line is now open.

Speaker 4

Hi, guys. Thanks for taking my question. I mean, given the stock reaction, I think people are focused on consensus. So I have two questions for you on that. For Ademica, scripts were up actually and then you Noted on the prepared remarks, you took, I think pricing concessions.

Speaker 4

Can you help us understand some of the dynamics going on with Identica? And similarly, it seems like on the Regeneron call, like where are you taking share? It doesn't seem like you're taking share Did you have any impact from them? And my last question is like a big picture question. You guys have guided to like being cash flow positive in

Speaker 2

Hi, Robin. Thanks very much. So your first question with respect to UDENYCA is in the scripts up, but what was the impact of pricing? And then with respect to similarly where is the share coming from and lastly the guidance. I'll let Paul first address the dynamics of the UDENYCA market and address the question of where the similarly share came from.

Speaker 2

Paul? Thanks, Denny. Thanks for your

Speaker 3

question, Robin. Yes, UDENYCA business, Robin, as we've guided With the launches and our strategy that market share and demand growth will increase In 2023, we reported that increase today. That's driven by 30% increase in demand quarter over quarter. What we've always guided to was the price impact, which was always a little bit harder to predict in the competitive markets. In the 3rd quarter, We saw a net selling price decline of about 9%.

Speaker 3

So that's the puts and takes. We do expect continued market share and demand growth Occurring over the Q4 and into 2024, driven by 2 things. The first is the enhanced payer coverage, which has Increased substantially for the brand as well as the expected launch of now our OnBody device. So between the auto injector and the OnBody if approved, We'll have 2 shots on goal to go after that bond per share, which is at 42%. Regarding similarly, We're executing on our strategy of targeting the Lucentis business and that's the first part of our strategy.

Speaker 3

So the majority of our business is coming from a combination of share from Lucentis, But also Avastin, which is also a target for us, that represents 40% of unit share. We're getting business from both of those in addition to new patient starts. Those represent the largest sources of our business in line with our strategy.

Speaker 2

Can I ask Yes? I would like to answer your last part of your question. With respect to returning to profitability and being cash flow positive next year, as I indicated in my opening remarks, we're very Cognizant of bringing our expense structure in line with our revenue structure. This quarter also We've guided downward with respect to our invested expenses and we will continue to see reduced expenses next year Even as revenues grow, we have not offered formal guidance of becoming profitable for next year. And once we get past, I think our Q1 call and we look at how the launches are going, essentially on body and Look, Torzi will be happy to revisit that for you.

Speaker 2

But we are very, very focused on driving the business Back to cash flow positive and back to profitability. As you've seen, expenses are down and sales are up.

Speaker 4

Super helpful. And just a follow-up on Odenica. Like as we think about on body device launching, Just to make sure we're all in the same realm, how do you think about the impact of pricing when you launch that? Could we see continued price declines? And shout out to Theresa like last call you did.

Speaker 4

Again, congrats on Tori. I'm not asking one on Tori, Congrats, but maybe just like you maybe delve deeper into AdenaCast so that we can all model it better next quarter and for next year.

Speaker 3

Yes. Thanks, Robin. So our focus here is we're going to be going into 2024 year 6 of the UDENYCA Life cycle is maximizing the long term revenue and profitability of this franchise. So if and when the on body device is approved, And we will launch that into each of the segments of the business where we believe we'll have a competitive value proposition, but also You'll be able to maintain discipline with our pricing so that we can drive profitability for this franchise. So we're going to be looking at every segment, but clearly be watching the market dynamics that occur in each of those segments, whether it's the clinic or the hospital And approach our launch accordingly.

Speaker 2

Robin, I would also add that we expect significant market share gain With UDENYCA next year and we're very cognizant of the margin and obtaining those gains. As you've seen the Care coverage has significantly increased over the past quarter and we expect to see that next year. But the overarching message for For the Edeniq franchise is that the long term strategy is succeeding. As Paul indicated, we're near 5 or 6 in this franchise. We were very, very careful with our pricing in order to have a strong price upon which to launch our additional presentations.

Speaker 2

That has been successful and even as other competitors who gave away more price have now fallen away, we are emerging in this market.

Speaker 7

Do you think you can have

Speaker 4

to lower price further? Just out of curiosity, I'm just trying to make sure that all the analysts are on the same page. We want to make sure We watched script growth and then if you missed on price, should we predict a little bit more price?

Speaker 2

We would seek to protect price even as we go forward having all three presentations.

Speaker 1

Great.

Speaker 4

Thanks so much. Congrats, guys. Thank you and gals.

Operator

Thank you. Our next Question comes from the line of Yigal Nochomovitz with Citigroup. Your line is now open.

Speaker 8

Hi, Debbie and team. Thank you for taking the questions. Just a quick housekeeping question. At one point, you had discussed having an R and D days during the Q4. I was just curious if that is still On the calendar, and then you also discussed additional monotherapy data for the IL-twenty seven program.

Speaker 8

Is that happening this year? And then more generally, with regards to liver cancer, obviously, there was data from Roche earlier in the year and then more The BeiGene abstracts related to the TIGIT in combo with Otezio and FEV. I'm just wondering how you're thinking about developing For HCC, given those data points, for the combo for your FIDGET and IL-twenty 7? Thanks. Hi,

Speaker 2

thanks for your questions. With respect to R and D Day, given the delay in the approval of OnBody, We're going to move that into Q1 from Q4. We want to have OnBody proved and ready to go on the market That's going to be an important part of the story. So we're going to move that out into Q1. With respect to IL-twenty seven Anna Liver, I'll let Doctor.

Speaker 2

LaValle answer those

Speaker 3

two questions.

Speaker 1

Hi, Yijing. We're super excited about The clinical development plans and in terms of presentations, we do have abstracts submitted on both the monotherapy and the HCC data to get the full data set and a more mature data set. So we'd anticipate that later this year and early next year. And once the abstracts are accepted, we'll make sure to It publicized that. In terms of how it's positioned, we're very excited about the data to date Having a patient population more similar to the atezo bev TIGIT HCC data than the Beijing program and think that the data should be comparable within that realm.

Speaker 8

Okay. Thanks. And then just one on the guidance, McDavid, I think you said for 4Q 'twenty three, dollars 85,000,000 to 95,000,000 Any way you could just elaborate a little bit more in terms of the relative contribution from the 3 marketed products as to how that will

Speaker 3

Sure. So earlier in the year, Timmy provided insight into how we feel that the adenimumab market is shaping up and that we expect Total, Eusembri sales for the year in the single digits. And so that's important to note as you think about where Yes. The portfolio guidance would go for the 4th quarter. So we expect most of the revenue growth in the 4th quarter to come from UDENYCA and SIMRLY.

Operator

Our next question comes from the line of Michael Nedelkiewicz with TD Cowen. Your line is now open.

Speaker 9

Thank you for the questions. I have 2. My first is, given the shift in timing of revenues and the lowering of your top line guidance. Has that impacted your development plans at all? I know we'll learn more on the Q1 Pipeline Day call.

Speaker 9

I'm curious if this has affected the scope of development for Your pipeline portfolio as of where we stand right now or for example, would you perhaps replace Anticipated revenues with other types of financing to more fully develop your pipeline? And then my second question relates to Usimri. I'm curious if you attribute AbbVie's ability to hold on to such high share for so long. Would you point to supply, the label or perhaps price? Thank you.

Speaker 10

Thank you. Thank you for

Speaker 3

the question, Planko. First of all, with respect to

Speaker 2

the development As I indicated in my opening remarks, we are significantly constraining all R and D expenses From to the middle of 2024 because of the revenue picture, we are very, very cognizant That we need to bring our R and D expenses and our overall spend into alignment with our revenue. And so we have made very, very deliberate efforts to revise our development spend and minimize it, I would say into mid next year. And no, we won't be going to alternative Forms of financing to support that. We think that's really very, very important to move the company back to Cash flow positivity and profitability, right? And so that's something we'll have to do until we get greater movement on the revenue.

Speaker 2

With respect to Ucimori, HUMIRA has been able to hold on to a significant A portion of the revenues there, I believe about 99%. Paul might have

Speaker 3

a little further color for you On

Speaker 2

the HUMIRA and Nucymure revenue picture as

Speaker 3

a function of

Speaker 2

the placement on the formularies and so on.

Speaker 3

Thanks for your question, Michael. I think based on what Abi reported that it was really a lower price that's Driving their ability to maintain these formulary positions. So that's what's driving it. And again, I reiterate our strategy was very different. We intended to bring You said we'd like to market for a segment of the business that desires a low affordable transparent price.

Speaker 3

And we're going to build that business from the bottom up and that's working. Our partners with Mark Cuban We're really helping with that. So it's 2 different strategies. We're approaching this strategy setting ourselves up for then The IRA in 2025 when we believe there'll be a lot of different considerations by the PBMs and the payers When the cost shifts during the catastrophic phase from the government to the payers themselves. Michael, the other point that I would

Speaker 2

To make to you is I would just direct you to David Stilwell's comments. While we reduced And the guidance, the revenue guidance for $15,000,000 for 2023. We also reduced the spend guidance by $15,000,000 And I think this illustrates that being very, very responsible with respect to revenues and expenses coming into alignment.

Speaker 3

Understood. Thanks for the question.

Operator

Thank you. Our next question comes from the line of Douglas Tsao with H. C. Wainwright, your line is now open.

Speaker 10

Hi, good morning. Thanks for taking the questions.

Speaker 8

So

Speaker 10

I guess, Paul, congrats on the progress that we've seen with similarly. I'm

Speaker 5

sorry, I'm having a

Speaker 10

little cough. When we think about the trends into the 4th quarter, Should we expect to see some further acceleration or do you think that we'll see sort of a little bit more of a linear trend in terms of adoption Now that we have the J code and you've had the J code in place for some time.

Speaker 3

Yes. Thanks, Doug. Yes, we're real pleased with the uptake. I think looking at the ramp, Projecting the same level of growth quarter over quarter, probably too optimistic at this point. We're going to continue to see Demand growth driven from the current book of business and the patients coming back in, but also new business that we get in.

Speaker 3

Again, we haven't guidance to what the final similarly number is, but we still maintain guidance that Sales are going to exceed $100,000,000 for the year.

Speaker 10

And Paul, do you think the opportunity just Improving your volume within your existing similarly accounts or are you still picking up new accounts?

Speaker 3

Yes, Doug. In the Q3, we increased the number of ordering accounts by 70%. So we've got about 550 accounts now That have ordered similarly 80% have ordered, reordered at least one time. So it's really this breadth and depth. We want to go deeper Into the accounts that are ordering, convert that still, incentives unit volume that's available, grab Avastin, where they've completed their step edits and at the same time they continue to broaden out for those accounts that maybe have been a little bit slower On the similarly adoption with biosimilars, what's really pushing that new account acceleration though Doug is the fact that We've got now the QCO well established, but also real world evidence that was just presented at the ASRS meeting, Demonstrating that Siverly is safe and effective in delivering on their clinical profile through Lucentis.

Speaker 3

We just hit 139,000 Unit shipped now, I know we've pressed released in the 3rd quarter was 100, but it's now 139,000. So we're going to bring along those that rule a bit slower On the biosimilar adoption curve.

Speaker 10

And final question, Paul, on similarly, is there a Type of account that you're really doing well in, is it the private equity backed practices or is it smaller practices? Just any color would be interesting to hear. Thanks.

Speaker 3

It's been a mix of everything, Doug. It's really just been once a retinal specialist understands that biosimilar to Lucentis is a great option for them. They get on board, they trial it, they get reimbursed And we start to see more rapid adoption there. So it's really across the board.

Speaker 10

Okay, great. Thank you. I'll hop out of the queue.

Operator

Thank you. Our next question comes from the line of Chris Schott with JPMorgan. Your line is now open.

Speaker 11

Great. Thanks so much. Just two questions for me. I guess first was just coming back to the biosimilar HUMIRA market. Can you just Maybe just elaborate a little bit more on the priorities for, Usimari as we head into 2024 given it sounds like 2025 is really the key year for the market opening up.

Speaker 11

And maybe just as part of that, I know you did a couple of 1,000,000 this quarter in sales, sounds like not a huge step up in 4Q. But should we think about a meaningful step up of sales in this product in 20 Or is this remain a relatively small business until we get out to 25 and more of the volume comes through? And I just had one follow-up after that.

Speaker 2

Thanks for the question, Chris. The issue With the Humira biosimilar market is really the position of Humira on the formularies. And We don't see significant growth in this market until 2025, until the Inflation Reduction Act comes into play And then sort of the pricing dynamics flip a bit. So we're projecting shallow but steady growth Throughout that time, but with the inflection in 25.

Speaker 11

Okay. Okay. That's helpful. And then just on UDENYCA, just any color Of how much of the sales this point is coming from the auto injector from versus the traditional presentation? As I just think about that Auto injector piece of it, do you expect any sort of inflection as I guess just the ecosystem gets more educated on the product?

Speaker 11

Or is Coverage really the key here and I know you've talked about some progress on that front. I'm just trying to get a sense of what the key factors that might lead to that auto injector seeing broader

Speaker 3

Yes. Thanks, Chris. So in the Q3, the prefilled syringe represented The vast majority of the UDENYCA volume, it was coming from all segments of the business. When we launched the auto injector in the quarter, it was really a first of its kind, a new innovation that the marketplace We had never implemented into the system. So we had to get payer coverage set up.

Speaker 3

At the same time, we then had to educate the providers and particularly the nurses and the pharmacists, get it on the formularies, the order set. So There's a lot of operational work that had to get done to get this set up. We've had about 300 Macau's order auto injector since it's been approved. So they're looking for the places where it can fit in the system. We expect that as the launch progresses, we're going to see continued demand increases And that will be buoyed as we move into 2024 as payer coverage continues to expand.

Speaker 3

So Once we then have the on body, we'll then be the only brand, Chris, with all three presentations, Being a total solution, meeting the needs of the patients and the providers. So we got 2 shots on goal then with the auto injector and the ODI To go after that Onpro market, which has remained fairly resilient at 42% share.

Speaker 11

Great. Thanks so much.

Operator

Thank you. Our next question comes from the line of Ash Verma with UBS, your line is now open.

Speaker 7

Hey, guys. Thanks for taking my question. I have 2. So the first one, I believe you have a milestone payment due to Junshi for the NPC approval. Can you remind us what's the timeline and the amount for that?

Speaker 7

And then second, I saw there was an 8 ks filed earlier that noted a smaller lease space going forward. Is there a new reduced workforce As a part of this, just surprised to see the space is now cut into half and any implications that you can mentioned for that be your cash burn? Thanks.

Speaker 2

Hi, Yash. Thanks for the questions. Let me take the last one first. We were able to reduce the footprint on the lease. Primarily that came up because we were in a period where there was a renewal period.

Speaker 2

So we had we were opportunistic and they've been able to do some consolidation. We have team members that work from home and then go back So we've done some sequencing with people in and out of the office. We're able to consolidate some space. And as I indicated in my remarks before, we're always looking for opportunities to reduce our expenses and this is one where We could do so. With respect to the milestone and its timing from Jinxie, I'll let McDavid Stowell comment on that.

Speaker 6

Yes. Thanks, Ash. So it's a $25,000,000 milestone payment and it will be paid in March 2024.

Speaker 4

Great. Thanks.

Operator

Thank you. Our next question comes from the line of Balaji Prasad with Barclays. Your line is now open.

Speaker 5

Good afternoon. This is Our question is about partnership opportunity for toripelumab. You mentioned that you received a lot of partnership interest from outside partners. Could you add some color on what therapeutic areas or what type of agents That you will be prioritized for future combo trials. And what type of collaboration and economy will you adopt for those partnership agreements for combo trials in order to achieve lower R and D costs next year?

Speaker 5

Thank you.

Speaker 2

Thank you. Great question. I'll let Raj to ask our Chief Medical Officer to address that. Raj?

Speaker 5

Thanks very much for the question. So I think As we look at the partnership space, I think the first thing I'll say is that the wealth of data and the robust So the data for LOQTORZI across different tumor sites and indications really sets us up well for partnerships together with it Pretty unique mechanism of action as well. I think towards the partnership opportunities and incomings that we're receiving are essentially And mainly in terms of novel combinations and the kind of avenue that we're taking with that will be more in terms of Drug supply agreements and supplying drug for partnership studies. We also, of course, have our novel assets I came in with the surface acquisition, so Cazdoso and CHS 114. And I think one of the important points I'd like stress says we do have global rights.

Speaker 5

So we'll be looking for potential opportunities with these 2 novel assets to Maybe ex U. S. Find partnership opportunities for potential revenue there. Thank you.

Operator

Thank you. We have time for one last question. Our last question comes from the line of Douglas Tsao with H. C. Wainwright.

Operator

Your line is now open.

Speaker 10

Hi. Thanks for taking the follow-up. I just wanted to just touch on UDENYCA a little. And I'm just curious from your perspective on the broader Environment within the pexograft and category as a whole where we've seen you really have successful maintaining shares, Gaining some share while maintaining your ASP and others have continued to see the ASP fall. So what do you think has been the sort of the driver of your success and your perspectives on what the next step is for this market?

Speaker 10

Thanks.

Speaker 2

I'll let Paul dive into that a bit for you, Doug. But I think that we bring As a core competency of the commercial team, a very deep and nuanced understanding of the Medicare Part B Thanks. As you know, our policy for a long time has been to be good guardians of ASP And not to rely simply on discounting to drive sales. The other issue I think here is that we have Deployed very successfully a strategy to maintain price and share for the long term As a basis upon which to launch our presentation and we are now successfully deploying that strategy. Our average selling price is well above the other competitors in the class, significantly above the innovator, for example.

Speaker 2

But I think that we are very confident

Speaker 8

in terms

Speaker 2

of our ability to understand price And really to execute our value proposition strategy without simply resorting to price in

Speaker 3

the market. Paul has some additional comments. I think that's exactly right, Denny. Doug, you look at what the competitor strategies have been and We've always viewed UDENYCA as a franchise. And so we applied the strategies that we needed to do In order to maximize the long term revenue, but also profitability of the brand.

Speaker 3

What we've seen with other competitors biosimilars in particular We just had a prefilled syringe to just use deep discounting for short term market share gains. And you've seen examples of what happens to that strategy. So we really have just taken a long term view. We've been disciplined with it. We're bringing the new presentations to market and we're going to position UDENYCA As the first and only franchise with 3 presentation offerings, because these patients You still need the extra Graston support, whether they're getting it in the office, whether they're getting it at home, we're going to have a solution for the patient, the provider Meet those needs.

Speaker 3

So it really comes down to that. And we're delighted that our strategy is paying off And that you're seeing it now in consecutive quarters.

Speaker 2

The other point that I would make, Doug, is we've successfully deployed Our Medicare Part B competency from oncology to ophthalmology, where we also were in a position where we launched Behind a very, very large competitor by a few months and then we're very successful

Speaker 3

in the 1st year of

Speaker 2

the market. I We're in excess of 25% market share now with similarly in the ophthalmology market. And as you may recall, we are in excess of 20% In the 1st year of UDENYCA, having launched behind a very large competitor at that point also. So I think this proficiency has been demonstrated twice.

Operator

Thank you. I would now like to turn the conference back over to Denny Lanfear for closing remarks.

Speaker 2

Thank you all for joining us today on our Q3 2023 update and we'll see you at upcoming conferences including the insurance conference and the UPS conference this week. Thank you, operator.

Operator

Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect.

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Key Takeaways

  • Coherus reported Q3 revenues of $74.6 million, up 27% sequentially and 64% year-over-year, while year-to-date SG&A and R&D expenses fell about 30%, leading to revised full-year 2023 guidance of $250–260 million in revenue and $300–310 million in combined R&D/SG&A.
  • Simerli (Lucentis biosimilar) net sales reached $40 million in Q3 (up 50% sequentially), capturing 28.6% share of the ranibizumab class and surpassing 100,000 doses in its first year, with full-year 2023 sales still expected to exceed $100 million.
  • The UDENYCA franchise grew Q3 sales 4% sequentially to $33 million and gained 4.3 share points to 16.5%, supported by expanding payer coverage and the launch of an auto-injector (300+ accounts), with an on-body injector approval and rollout anticipated in early Q1 2024.
  • Ucimri (adalimumab biosimilar) launched July 3 at a low list price of $9.95 per carton, generating $1.4 million in Q3 sales from 2,300 cartons, with modest growth expected through 2024 and accelerated adoption projected in 2025 under the Inflation Reduction Act.
  • Coherus’s first PD-1 inhibitor, Lactorzi, was approved for relapsed/metastatic nasopharyngeal carcinoma and is set to launch in early Q1 2024 for ~2,000 annual U.S. patients, while the Surface Oncology acquisition adds novel IO assets (CAZ-DOZO IL-27, CHS-114 CCR8) and an ILT4 program IND planned for Q1 2024.
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Earnings Conference Call
Coherus BioSciences Q3 2023
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