Coherus BioSciences Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 8, 2024

There are 12 speakers on the call.

Operator

day and thank you for standing by. Welcome to the Coherus Biosciences Second Quarter 2024 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 Jamie Taylor, Head of Investor Relations. Please go ahead.

Speaker 1

Thank you, operator. Good afternoon, and welcome to Coherus Biosciences' Q2 2024 Earnings Conference Call. Joining me today to discuss our results are Denny Lanfear, Chief Executive Officer of Coherus Brian McMichael, Chief Financial Officer Paul Reeder, Chief Commercial Officer Doctor. Rosh Dias, Chief Medical Officer and Doctor. Teresa Livalli, Chief Development Officer.

Speaker 1

Before we get started, I would like to remind you that today's call includes forward looking statements regarding Coherus' current expectations about future events. These statements include, but are not limited to, the following: expectations for the timing of future clinical studies expectations about future partnerships projections of future revenue and expenses. 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, including risks and uncertainties inherent in the clinical drug development process 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 call today are made as of this date, and we undertake no duty to update or revise any forward looking statement.

Speaker 1

And now, I'll turn the call over to Denny.

Speaker 2

Thank you, Jamie. Good afternoon, everyone, and thank you for joining us. Today, we're pleased to share updates from the Q2 2024, a period in which we made definitive progress in executing upon our plan to align all aspects of our business to a focus on oncology. Our strategic focus on oncology is proving its merit. With streamlined operations in a recently streamlined portfolio, we grew total sales 10% year over year in the second quarter from $59,000,000 to $65,000,000 even without similarly the ophthalmology biosimilar we divested earlier this year.

Speaker 2

UDENYCA is delivering impressively as Lactoresi builds very nicely. As our Chief Commercial Officer, Paul Reeder will describe shortly, the 3 presentations within our UDENYCA franchise continue to expand our opportunities in the marketplace. As the only brand offering 3 presentation options, refill syringe, the auto injector and the On Body injector, we hold a clear competitive advantage that we believe will endure and increase over the long term. Our average selling price remains consistently strong and our market share is growing. As an oncology company, our mission is to extend the survival of patients with cancer.

Speaker 2

Central to the fulfillment of that mission is Lactorsi, our first commercial immuno oncology agent, which demonstrated a profound survival advantage in the data supporting its FDA approval late last year for the treatment of nasopharyngeal carcinoma. The launch of LOQTORZI continues to proceed according to plan. And Paul will provide further updates on this during our call today. Beyond our commercial portfolio, we maintain our strong conviction in our pipeline of innovative immuno oncology drug candidates. We are advancing clinical studies across areas of clear unmet medical need, including head and neck cancers, non small cell lung cancer and hepatocellular carcinoma.

Speaker 2

Doctor. Teresa Lavalley, our Chief Development Officer and Doctor. Raj Dias, our Chief Medical Officer, will describe these studies further on our call today. I'm especially pleased to report today that as a direct result of our continued efforts to manage our cash, reduce both our debt and headcount, Brian McMichael will report that we ended Q2 $159,000,000 on the balance sheet, positioning us well for the second half of this year and beyond. I'd like to congratulate Brian on the exceptional skill and leadership he has demonstrated since taking the role as interim CFO earlier this year.

Speaker 2

As announced in our press release this morning, Brian has now been appointed to the Chief Financial Officer role at Coherus and with my support, the full support of the Board of Directors. Brian's deep financial expertise owned throughout his time at Gilead Sciences and further demonstrated since his arrival at Coherus a few years ago gives me great confidence. My confidence extends to our product portfolio. Octorzine, plus our competitively positioned pipeline, represents long term value creation for shareholders. The pace of executing our strategy has been brisk and we have strong momentum carrying us forward into the quarters ahead.

Speaker 2

And now with that, I'll turn the call over to Paul.

Speaker 3

Thank you, Denny, and good afternoon, everyone. Our focused execution in oncology is delivering results. I am pleased to report a 5th consecutive quarter of top line revenue growth for UDENYCA, strong progress on Lactorsy following its Q2 of commercial launch. Regarding the quarter's performance, total net revenue was $65,000,000 which included $58,500,000 from sales of marketed products and $6,300,000 from a non recurring upfront cash payment received for the out licensing of Lactorsese rights in Canada. Q2 UDENYCA net revenue was $50,900,000 dollars a 19% increase quarter over quarter and a 60% increase over Q2 2023.

Speaker 3

Lactorsi net revenue nearly doubled to $3,800,000 in Q2 compared to $2,000,000 in Q1. I'll now speak in more detail about each brand starting with L'OCCTOURSE. First half twenty twenty four, a top priority was setting up bloktorzi to become the future standard of care in NPC. We remain very confident achieving this ambition. LOCTORZI offers unprecedented efficacy for NPC patients.

Speaker 3

Like all new product launches, requires substantial groundwork to ensure providers have access to Lactorsi. Pleased to report that many operational milestones have been achieved, setting Lactorsi up for future growth. Some examples of these include: 1st, Lactorsi was included in NCCN, ASCO and TwinPath guidelines. In NCCN, longtorsi is the only PD-one with a Category 1 designation for first line use and the only preferred regimen in second line plus. 2nd, payer coverage has now been confirmed on nearly 100% targeted medical benefit lives in health plans including Medicare fee for service, Medicare Advantage and national and regional commercial plans.

Speaker 3

3rd, product specific permanent J code has been granted by CMS and took effect July 1, which will enable electronic billing and faster or predictable reimbursement for providers. 4th, among the top academic research hospitals, Lactorsi is now accessible in all 33 NCCN institutions. With the foundation now set to enable broad access to Lactorsi, our efforts are solely focused on driving new patient starts in the Lactorsi eligible patient segments, we believe constitute approximately 2,000 patients annually. I'll now speak in more detail of the NPC patient populations, the progress we've made in Q2 and our priorities for the second half of twenty twenty. NPC patients within the Lactorsi eligible indications include 3 patient segments.

Speaker 3

1st, those with recurrent locally advanced disease. Majority of NPC patients are diagnosed in the local or locally advanced setting. Here, patients are diagnosed at early stages and receive radiation or chemo plus radiation as their first treatment with many patients being cured. These patients drop out of the NPC treatment pool unless they experience local recurrence at any point in time, that may become LOCKTORC eligible and will receive LOCKTORC plus chemotherapy. These patients account for approximately 1 third of the 2,000 who are locked towards the eligible.

Speaker 3

The second patient segment are those with first line metastatic disease, which could be metastatic recurrence from early stage disease or de novo metastatic. These patients account for approximately 1 third of the 2,000 who are locked towards the eligible. Historical treatment for these 2 patients subpopulations include chemotherapy or a combination of chemo plus off label PD-one treatment. Real world data shows current off label PD-one use of approximately 25% segment. This is important in the near term from a sales ramp perspective.

Speaker 3

We do not expect the patients currently on an off label PD-one regimen will be switched to Lactorsi if the patient is already responding to treatment. Now the 3rd patient segment is second line plus with metastatic disease. These patients account for the remaining 1 third of LOQTORZI eligible patients and will receive LOQTORZI as monotherapy. Patients in the first two segments I described are our primary focus for the following two reasons. First, based on the results of the JUPITER-two trial, these are the patients who can derive the greatest survival benefit.

Speaker 3

And second, these patients are likely to deliver the longest duration of treatment, which is a key driver of LOQTORZI's revenue ramp over time. In Q2, the total number of LOQTORZI treated patients more than doubled by an estimated 100 new patients and real world data shows 2 key findings. 1st, a minority of drug treated NPC patients are new to treatment in any given quarter, so it will take time for us to acquire these new patients. 2nd, we are acquiring our targeted patient types with 40% of LOCKTORZI patients being treated in the locally advanced setting and approximately 75% of total LOCKTORZI patients being treated in combination with chemotherapy. These real world data combined with the current off label PD-one use confirms our view that lectorosi will follow a steady revenue ramp in the near term, fueled by new patient acquisition with sustained growth over time driven by duration.

Speaker 3

80% of long term value is from early line continuing patients, which we estimate will take 3 to 4 years to fully materialize. Overall, the launch is progressing well and we remain confident that Lactorsi will achieve a dominant market share position, the NPC market that we estimate to be valued at $150,000,000 to $200,000,000 In the near term, our priorities are focused on 3 revenue drivers: driving new patient share, strong HCP patient identification, ensuring LOCKTORZI messaging is delivered at the time of treatment decision and optimizing the duration of long Torzi treatment. Now regarding UDENYCA. UDENYCA delivered another quarter of revenue growth, driven by continued strong execution and fueled by 3 drivers. 1st, the commercial launch of UDENYCA Hot Body.

Speaker 3

2nd, UDENYCA is the only pegfilgrastim brand with 3 device options to meet the unique needs of providers and patients. And third, broad payer coverage, which opens access to significantly more patient lives. As for key performance indicators for the quarter, UDENYCA franchise demand grew 25% quarter over quarter. All three product presentations grew in the quarter with on body representing 60% of the total unit growth. OnBody and auto injector ended the quarter at 13.5% and 10% of the total SKU mix respectively.

Speaker 3

Franchise market share was 29%, an increase of 4 market share points quarter over quarter. Regarding the launch of UDENYCA On Body, we're very pleased with the launch performance to date and customer receptivity continues to be very positive. Fueling customer adoption, our innovative and differentiated features such as UDENYCA OnBody's 5 minute injection time compared to the 45 minute delivery time for Neulasta Onpro. In summary, our long term strategy for UDENYCA is delivering as planned and we expect continued revenue growth in the second half of twenty twenty four. I'll now turn the call to Doctor.

Speaker 3

Teresa LaValle. Teresa?

Speaker 1

Thank you, Paul, and good afternoon, everyone. Firstly, we congratulate our partner, Tunshi Biosciences for continued progress with advancing torapalumab development. The Committee for Medicinal Products for Human Use or CHMP in Europe adopted a positive opinion recommending approval of LOCK4Z, a next generation PD-one inhibitor for the first line treatment of patients with nasopharyngeal carcinoma in combination with cisplatinib and gemcitab B. And secondly, for the first line treatment of adult patients with unresectable advanced recurrent or metastatic esophageal squamous cell carcinoma in combination with cisplatinibpaclitaxel. The CHMP positive opinion is based on data from the Phase 3 study JUPITER-two for MPC and JUPITER 6 for esophageal squamous cell carcinoma, demonstrating statistically significant and clinically meaningful improvements in survival in these two indications.

Speaker 1

Importantly, while torapalumab has demonstrated efficacy in these studies, torapalumab safety profile is consistent with the PD-one inhibitor class. If approved, this will expand marketing of torapalumab beyond the U. S. Into the EU. This potential approval is important to further demonstrate the efficacy and safety of torapalumab as well as the quality of the drug and clinical data sets.

Speaker 1

For our tumor microenvironment targeting pipeline, we have global rights. And as we look to develop these assets in combination with torapalumab, EU approval will facilitate future approvals with novel agents. Executing on our combination strategy for torapalumab indication expansion. Furthermore, while the U. S.

Speaker 1

FDA will not accept Phase 3 single country data for approval, they have stated on several occasions the data sets will support contribution of components. Development of our novel pipeline and tumor types where torapalumab has data may simplify any Phase 3 study design. In China, torapalumab now has 10 marketed indications. Following the recent approval of torapalumab in combination with paclitaxel for the first line treatment of recurrent or metastatic triple negative breast cancer based on the Phase 3 TORCHLIGHT data. Corapalumab is a foundational asset in the Coherus pipeline and now is being evaluated in Coherus sponsored clinical studies with casdocaqetag, an anti IL-twenty seven antagonist and with CHS-one hundred and fourteen, an anti CCRA antibody preferentially targeting tumor resident immune suppressive T regulatory cells.

Speaker 1

In addition to our internal development and our partner Junxi's development, we have several partnership discussions ongoing and look forward to the potential to progress and advance these exciting clinical studies. For our internal efforts, caztosecetag development with torapalumab continues. Tomorrow at the IO Summit Conference in Philadelphia is an oral presentation on the strong data package supporting development in HCC. While inhibiting cytokines is a validated approach in inflammatory diseases with multiple approved antibodies. Kaztoseqetug is the 1st cytokine antagonist to show safety, immune activation and monotherapy responses in cancer patients.

Speaker 1

In preclinical models, blocking IL-twenty seven results in immune activation in brain, liver and lung. Preclinical tumor models only show anti tumor activity in response to IL-twenty seven inhibition in liver and lung models. 3 different HCC mouse models, carcinogen induced, NASH induced or hep A16 HCC cell line show anti tumor response to IL-twenty seven inhibition. Further in liver cancer, Gyumshi has recently announced the positive results from a Phase 3 study of torapalumab in first line atacellular carcinoma in combination with bevacizumab. These results will be important in supporting the randomized Phase 2 study of ketogenic key tag in combination with torapalumab and bevacizumab in first line HCC for efficacy, safety and relative contribution data.

Speaker 1

Our second key pipeline asset, DHS-one hundred and fourteen, a highly selective cytolytic anti CCR8 antibody continues to progress in the clinic. Eliminating immune suppressive Treg cells in the tumor has been attempted by the field evaluating several approaches, but with the problem of depleting Treg cells broadly leading to autoimmune toxicity and also depleting T cells and thus limiting antitumor activity. The CHS-one hundred and fourteen clinical data demonstrating peripheral 14 clinical data demonstrating peripheral depletion of CCR8 positive Treg cells and not depleting Treg cells broadly establishes proof of mechanism in cancer patients. PCRA positive key rate cells have a high prevalence and density in a number of solid tumors with the highest levels in head and neck, gastric and cervical cancer. For this reason, our CHS-one hundred and fourteen dose expansion in the Phase 1 study is evaluating head and neck cancer and includes pre and on treatment biopsies to evaluate Treg depletion in the tumor.

Speaker 1

At ASCO this year, one of the experimental therapeutics presentation that impressed me most was 5 Lenovo Medicines, evaluating their CCR8 antibody LM-one hundred and eight in combination with torapalumab in advanced gastric cancer patients. We were encouraged by these early clinical data showing an acceptable safety profile and an overall response rate of 36.1%, which we believe demonstrates proof of principle for CCRA targeting in combination with torapalumab and a tumor type expected to show benefit. Lastly, to update you Coherent CHS-one thousand ILT-four team for submitting a quality IND package to the FDA that has been accepted and we plan to advance CHS-one thousand to clinic to establish single agent safety and rapidly move into combination with torapalumab for treatment of solid tumors. It is designed to block ILT4 activity and promote an active or pro inflammatory immune response. The ILT receptor family modulates the activity of the innate and adaptive immune system and plays a role in innate immune cell mechanisms that lead to tumor escape and PD-one resistance.

Speaker 1

This is a promising target in a potent antibody that Coher is discovered. I'll now turn the call to Doctor. Dias, our Chief Medical Officer. Raj? Thank you, Teresa.

Speaker 1

Octorzi, with a

Speaker 4

profound survival advantage demonstrates nasopharyngeal carcinoma and its accompanying approval across all lines of therapy for NPC, continues to form the foundation of our IO franchise and in addition, continues to demonstrate efficacy outside NPC, most recently in first line hepatocellulocarcinoma patients with a published Phase 2 toripalumab, nevacizumab later in clinical cancer research and the Phase 3 HEPLISAV study meeting its primary endpoints of PFS and OS as Teresa has pointed out. We've been clear in articulating 3 very distinct strategies for further development of our OIF franchise, including development of LOQTORZI outside MPC. Firstly, combination with our internal IO pipeline of the competitively well positioned assets of Zosiketa and CHS-one hundred and fourteen. Secondly, combinations with external partners at the discovery or close discovery stage where we would provide Loptozy combination with partner companies, early stage assets where the partner company would fully fund development. And thirdly, combinations with external partners at a later Phase 3 stage of development of novel agents, trials of registration intent, where again, we provide LOCKTOLI for combination with partner companies late stage assets and where again the partner company would fully fund development.

Speaker 4

This strategic approach enables effective resource allocation focused towards our internal pipeline development, I'm pleased to report that we're making good progress on all three fronts. Kedovo, our IL-twenty seven targeting antibody continues to progress to plan in our combination study to look towards the second to fourth line non small cell lung cancer. As a reminder, this is intended to be followed by a Phase 3 randomized controlled trial in second line non small cell lung cancer. We're also on track to start first line HCC combination study with LUXORVI in quarter 4 this year, building upon the impressive triplet combination data presented at ASCO GI at the start of this year. DHS-one hundred and fourteen, our CCRA targeting antibody, has completed dose escalation and is now progressing through indication expansion into head and neck cancer, both as monotherapy and in combination LOCK2LD.

Speaker 4

This from the dose escalation portion of study was presented at ASCO in June, showing an acceptable safety profile with no dose limiting toxicities, PK dose proportionality, proof of mechanism with depletion of peripheral CCRA positive Tregs and a disease control rate of 47% in an advanced solid tumor population that was heavily pretreated. Our partner programs incorporating LOCKTORZI in early stage with ENB Therapeutics, collaboration with the Cancer Research Institute in ovarian cancer, as well as the late stage multinational programs in combination with BTLA in limited stage small cell lung cancer and with the Inovio vaccine in the HPV positive early stage head and neck cancer continue to plan with the latter in particular being in the same physician group of head and neck oncologists also treat MPC. We look forward to announcing further partnerships over the coming months. And with that, I'll hand over to Brian McMichael, Chief Financial Officer. Brian?

Speaker 5

Thank you, Rosh, and good afternoon, everyone. Following the summary of revenues provided by Paul, I will focus on the rest of the P and L and cash. Cost of goods sold for Q2 2024 was $28,400,000 compared to $24,800,000 in Q2 last year. The increase was driven primarily by increased demand for UDENYCA and non recurring costs related to Ucimri. Q2 marked the 1st full quarter following mid single digit royalty on UDENYCA net In addition, the mid single digit royalty on UDENYCA net revenues payable to Amgen expired this past July 1.

Speaker 5

R and D expense totaled $22,000,000 and decreased $1,300,000 6% from Q2 a year ago. The decrease was driven primarily by lower headcount. Additionally, decreases came from costs not recurring for programs terminated in previous periods and divested products, partially offset by investments in our current pipeline. SG and A totaled $35,200,000 and decreased $10,000,000 and 22% compared to Q2 in the prior year. The decrease primarily reflects savings from lower headcount expenses for divested products that did not recur and our ongoing cost reduction efforts.

Speaker 5

Interest expense of $5,300,000 decreased $4,600,000 46 percent compared to Q2 in the prior year. Q2 2024 was the Q1 we started to see savings from the full payoff of our $250,000,000 principal amount term loan, which occurred during the quarter. The Q2 2024 net loss was $12,900,000 or $0.11 per diluted share compared to a net loss of $42,900,000 or $0.49 per diluted share for the same period in 2023. Non GAAP net loss per share, which excludes the gain on divestiture of USEMRI, was $16,400,000 or $0.14 per diluted share in Q2 2024 compared to $32,800,000 or $0.38 per diluted share for the same period in 2023. Cash, cash equivalents and investments in marketable securities were $159,200,000 as of June 30, 2024 compared to $117,700,000 at year end.

Speaker 5

As a reminder, during the quarter, we paid off $250,000,000 in term loan, as I mentioned earlier, entered into a new $38,700,000 term loan due May 2029, sold revenue rights for $37,500,000 and received $40,000,000 $6,300,000 in exchange for the sale of Eusemyri and the out license of the Canadian rights to Octorzi, respectively. Today, we are reiterating our expected range of combined 2024 R and D and SG and A expenses of $250,000,000 to $265,000,000 This guidance includes approximately $40,000,000 of stock based compensation expense and excludes certain business development activities. These strong quarterly results are the outcome of tremendous execution on the part of our team. With that, I will turn the call back over to Denny for closing remarks.

Speaker 2

Thank you, Brian. I'm happy to report today we executing very well on our 4 part plan to deliver shareholder value. 1st, as Paul described, driving the top line. Secondly, as Brian's described, controlling our operating expenses. 3rd, as Tricia and Raj described, advancing our pipeline of tumor microenvironment focused assets.

Speaker 2

And lastly, making substantial improvements

Speaker 3

in our capital structure.

Speaker 2

We're proud of our accomplishments over the Q2 and we remain dedicated to our mission of extending the survival of cancer patients. Now happy to open the line for questions. Operator?

Operator

Our first question will come from the line of Yigal Nochomovitz with Citi.

Speaker 6

Hi, this is Ashik on for Yigal. Thanks for taking my questions and congrats on the quarter. I just had a few on the LOCKTORZI launch in NPC. Could you give us any color on which types of patients you're treating? Are they primarily newly diagnosed patients?

Speaker 6

Or are you seeing switches from other patients on off label PD-1s? And on the same topic, where are you with the payer coverage access and how should we think about the J code as an inflection point for sales growth this year? Thanks.

Speaker 2

Hey, Ashik. Thank you very much for your questions. Paul, do you want to cover the issue of the MPC launch and whether we bumped into any switching province and secondarily, the payer coverage question?

Speaker 7

Yes, sure. Thanks for your question. So the MPC launch is delivering in line with our expectations. The patient share that we're seeing is really a very heterogeneous mix as we expected. We've got patients in later lines of therapy and these patients are getting Lactorsia's monotherapy, but they're going to have shorter durations because they're going to be second, third, fourth line.

Speaker 7

We're also very encouraged to be seeing patients in these early launch periods of the early line patients. And these patients are very, very important because these are the patients who will have longer durations of treatment. And as these patients continue quarter over quarter that long duration, that's how we see the revenue ramp over the long term. But in the short term, we see it as a steady ramp as we work through this heterogeneous mix of patients and that patient mix begins to stabilize. As it relates to the payer coverage, we have virtually no payer issues right now.

Speaker 7

We've got now nearly 100 percent of the targeted payer medical benefit lives across Medicare fee for service, the national and regional health plans, both on commercial and the Medicare Advantage. So, we are very, very pleased with the unrestricted coverage we have in NPC right now. And as it relates to the J code, your question was, is it going to be an inflection point? The way that we see the J code here is really enabling the electronic billing and faster, more predictable reimbursement for providers. So I wouldn't necessarily characterize it as a significant immediate revenue inflection per se, but certainly its availability will remove any operational barrier in any account that doesn't allow for use of products until the J code is in effect.

Speaker 7

So I think we're very I think we're really set from an access standpoint now moving into the second half of the year. I feel very encouraged that those any of those impediments are behind us.

Speaker 2

Paul, can you just comment a bit with respect to the issue of the switch, and I think which was one of our Shik's questions. And then secondarily, a progress on the NCCN formularies.

Speaker 7

Yes, sure. As I mentioned in my prepared remarks, any patient that is currently on a off label PD-one or PD-one chemo regimen, we don't believe that they're going to switch if the patient is responding to treatment. That being said, what we've seen in the real world data here in just the first couple of quarters is that we are seeing patients who have been re challenged after prior PD-one treatment. And usually the off label PD-one was typically prescribed in the earlier line of treatment in combination with chemotherapy. And therefore, by the time the patient was retreated with Lactorsi, the patient had already progressed to a later line.

Speaker 7

So in these cases, we would expect a shorter duration of Lactorsi use. That being said, we're encouraged the doctors are willing to consider retreatment with PD-one failures and that patients were or the payers were approving the product. So those are encouraging signs. And then as it relates to the access on the NCCN institutions, we've now got accessibility to lock Toresey on all 33 NCCN institutions. So again, that operational milestone was achieved here in the Q2.

Speaker 6

Thanks very much.

Operator

Our next question will come from the line of Brian Chiang with JPMorgan.

Speaker 8

Hey, guys. Thanks for taking our question this afternoon. Maybe just one on uvetaetide unit growth that you saw this past quarter. You mentioned that most of the unit growth came from On Body. So we're just trying to better understand the dynamics here.

Speaker 5

Can you just tell us

Speaker 8

a little bit more about the biggest contributor that's driving the uptick across all of your presentation this past quarter? And more importantly, how sustained do you think this momentum that we're seeing today across all three presentations? Thanks.

Speaker 2

Thanks, Brian. Great question. Paul, do you want to address the issue of the SKU mix and the growth across the quarter for Brian?

Speaker 7

Sure. Thanks for your question, Brian. Let me start just by reiterating our goal for the UDENYCA franchise and that's to maximize the long term profitability and sustainability of the franchise. Brian, in our investments to bring these innovative device presentations to market combined with our consistent strong execution is really what's delivering these results. UDENYCA now is strongly positioned in the pegfilgrast to market.

Speaker 7

And we said multiple times that once we launch these new devices, we're going to drive market share gains. And that's what you're seeing. We're delivering on that promise. And these market share gains are coming basically in the last 5 quarters from an 11% share to 29% share. And we remain confident that UDENYCA will continue to grow in the second half of twenty twenty four.

Speaker 7

And it's going to be fueled by 3 of these growth drivers, Brian. The first is the commercial launch of OnBody. And that's really because we now can compete head to head and access the entire pegfilgrastimarket. And secondly, the payer coverage, which nearly doubled in 2024 compared to 2023. So that opens up significantly more patient lives.

Speaker 7

And then the third is our disciplined management of ASP. And that's really important for our customers, providers, payers, etcetera, hospitals because it provides them greater predictability, which they value. So moving forward in the second half of the year, we still are very confident that the franchise is going to grow. All three product presentations grew in Q2, but we see the YON BODY devices really being the driving force of the growth in the second half of the year, largely because of the accessibility to the entire market. That being said, we are still seeing nice uptake in the prefilled syringe and the auto injector presentations and we're finding now that customers are really able to now choose amongst the presentations that fit their unique needs and the needs of their patients.

Speaker 7

So we remain very confident in the second half of the year and the continued growth of the franchise.

Operator

Our next question will come from the line of Douglas Tsao with H. C. Wainwright.

Speaker 9

Hi, good afternoon. Thanks for taking the question.

Operator

It looks like Doug may have disconnected. We'll move to the next question. Okay. Next question will come from the line of Bilaljahangiri with Truist Securities.

Speaker 5

Hi, congrats on the quarter. We had a couple of questions here. We were wondering what differences would you expect to see from using taui versus tivo in the triplet for HCC? And given that a bunch of your pipeline targets are not don't have precedence of approval in the U. S.

Speaker 5

Which permutation and indication do you envision as your next Phase 3 after HCC?

Speaker 2

Thanks. Doctor. Teresa O'Malley, the company's Chief Development Officer is with us today. Teresa, can you comment on the question, I'm sorry, with

Speaker 4

triplet?

Speaker 1

Yes. So for the HCC study, looking at torapalumab plus bevacizumab, casdosedaketug and obviously in a Phase 3 study, we would compare it with atezo bev. The differences obviously are PD L1 versus PD-one. The data set for torybev from June she in a Phase 3 study has been reported positive, but we're waiting to see the data. There was a Phase 2 was seen with the IMbRAB 150 atezoBev Phase 3 study.

Speaker 1

So based on the data there, we would expect Torrey to be well suited and positioned to go against the atezo and then of course adding Kastuzaketag should add increased benefit. So really extending the survival for those first line HCC patients without an increase in toxicity, really good tolerability to date. In terms of the second question was, could you repeat that? I'm sorry, was it about the next study that we

Speaker 5

Yes. What combination or what triplet, doublet and what indication is your gut feel, I guess?

Speaker 1

Yes. So in development right now, we're building off of the activity that's been observed in the early phase studies for casdosing key tag, both in non small cell lung cancer. So as Rosh mentioned, we're actively enrolling in the second or fourth line non small cell lung cancer study with KESTAV and torapalumab. We'd also like to look in other areas in non small cell lung cancer, giving the strong disease linkage there. And then the HCC study is on deck to open later this year?

Speaker 2

Raj has some additional comments with respect to this question. Pretty awesome. Raj, go ahead. Yes. Thanks very

Speaker 4

much for your question. Just one point to add to your first question on essentially some of the difference between atezo and also taurit. So one thing that we do know is that the ADA, the anti drug antibodies with atezo is reasonably high, probably in the 40% range, whereas we also know for toripanumab, it's in the single digit range. So I think that's one additional consideration I'd add to what Teresa already mentioned about the Ateezo and the Tore. Great.

Speaker 4

Thank you so much.

Operator

Our next question will come from the line of Douglas Tsao with H. C. Wainwright.

Speaker 9

Hi, good afternoon. Sorry about that earlier. Just curious your perspectives on now that you're all in the NCNN centers, how much of the market is there versus patients being treated in the community setting? And how quickly or how long do you think it will take to penetrate the sort of broader community for the MPC market?

Speaker 2

Thanks for the question, Doug. Paul, do you want to give Doug a little insight on the patient proportion split and NCCN in the uptake projection?

Speaker 7

Yes, sure. Thanks for your question, Doug. We believe that about 60% of all the NPC in the United States is treated in some kind of academic NCCN type of setting of care. 40% is still in the community. And after the 1st couple of quarters, our Lactorsi business is about 2 thirds in the hospital.

Speaker 7

So it's tracking very closely to that in relation to their to the overall treatment. I think little as it relates to the uptake in the community setting, Doug, with a rare cancer, a lot of these oncologists in the community might be seeing NPC, 1, maybe 2 patients a year. A rare cancer as you know. So what we've got to do and our plans are all focused on is continually engaging with these community oncologists that are treating NPC. And so when they get that patient that's locked towards the eligible across one of those 3 patient segments that I described, we've got that locked towards the message and we've got everything set up to get that new patient start.

Speaker 7

So that's where our complete focus is right now in the second half of the year is really to drive the new patient acquisition across both segments, community and the NCCN and academic institutions. And I believe we're going to make great progress there as the year unfolds.

Speaker 9

Great. That's really helpful. And Paul, maybe just on UDENYCA, I'm just curious, you guys have had a really nice recovery in terms of share and a revamp in terms of revenue performance. I'm just curious, are there particular segments where you're having more success with the On Body and auto injector or prefilters and just your overall portfolio of products versus the other or is it pretty widespread right now?

Speaker 7

Yes. Doug, with UDENYCA, we're seeing growth across all segments of the business. When I talked to you last in May on the Q1 call, we were only a few weeks into the call and most of the uptake at that time was in the clinics. Now we're seeing it across all segments of the business. Auto injector, if there's one segment where that's probably being used more than the other, it's going to be in the clinics.

Speaker 7

But essentially the entire franchise is growing and on body we're still only 1 full quarter in, but we're really, really pleased with the penetration it's making across all the segments. So I think that's where we're going to continue to see the growth in the second half of the year. We're very confident in that.

Speaker 9

Okay, great. Congrats on the progress.

Speaker 2

Thanks, Doug.

Operator

Our next question will come from the line of Mike Nadelkovich with TD Cowen.

Speaker 10

Great. Thank you for the question. I just have one on torapalumab. Can you remind us what milestones and or royalties are owed to Jinxi based on your current indication? And what obligations do you have to them relative to the development path for torpala mAbs or the various combinations that plan to test?

Speaker 10

Thank you.

Speaker 2

Great question, Mike. So, Junshi gets a $25,000,000 approval milestone, which we have paid half. So we paid 12.5. The other 12.5 is due in Q1 2025. Secondarily, Junshi gets a 20% royalty on net sales, which is pay as you go.

Speaker 2

With respect to your cost sharing question and the development programs, we are not obligated to share costs, for example, of the torpilumab plus BTLA program, which is going into a segment of small cell lung. So, one of the advantages of our development strategy, as Raj pointed out in his prepared remarks, is that we sought deliberately to have others develop products and go into pivotal trials and pay for those pivotal trials. And then when the label gets done by the FDA, we can sell into these commercially. So our objective is to line up a number of these. We have, I think, 2 now, one with Junshi, one with Inovio.

Speaker 2

We'll continue to focus on that over the next 6 to 12 months. You'll probably see more of those. But we think this is a very effective strategy for development that reduce costs. So no, we're not obligated for further development unless we choose to.

Speaker 10

Got it. And does Junxi have any does the royalty extend to potential future approvals and other indications, potentially in combination with your in house assets?

Speaker 2

The royalty extends to any to our palimab sold in the United States regardless of indication, whether it's MPC or lung or gastric or whatever. It's just simply straightforward royalty on torapalumab sales. You're not obligated to pay any royalty of course on any Joo and Qi assets.

Speaker 10

Okay. And then are there any associated milestone payments as well or

Speaker 5

is it are those in the range of the year now?

Speaker 2

There are some additional sales milestones down the road. However, we don't feel that those are really relevant because most of those milestones were constructed at a time when we expected to have much larger indications such as not small cell lung, the number of things there indications will take a bit to get to. So we don't think those are really economically relevant to the modeling.

Speaker 4

Got it. Thanks a lot.

Speaker 2

Thank you, Mike.

Operator

Our next question will come from the line of Colleen Cusi with Baird.

Speaker 11

Great. Good afternoon. Congrats on the progress. Thanks for taking our questions. For UDENYCA, can you comment on what's been resonating with prescribers when choosing the OnBody?

Speaker 11

And what do you think is going to be kind of the big growth drivers for OnBody adoption? And then I have a couple of development follow-up questions.

Speaker 2

Great. Paul, do you want to talk a little bit about our experience in the field, the reaction to the customer base with On Body and the growth drivers for Colleen?

Speaker 7

Yes, Colleen, thanks for your question. I think what's really resonating amongst our customers is the innovative and differentiated features of UDENYCA On Body. Probably the most common feedback we've been getting from customers is how much they appreciate the 5 minute injection time for UDENYCA OnBody compared to the 45 minute injection time for the innovator. That doesn't sound like it would be that important, but for a patient the next day that has to wait for this injection to occur, 5 minutes it's done and they can then get on with their day and their lives. And so that's been one of the most important differentiated features.

Speaker 7

I think the other drivers too, Colleen, is really what I mentioned in my prepared remarks. We have now broad payer coverage, so it's highly accessible to more patients. And equally as important is our stable ASP. So you set everything else aside and having a predictable ASP, which drives provider reimbursement, it's very, very valuable. So you put the total value proposition together, innovative device features, broad payer coverage, a consistent and stable ASP.

Speaker 7

And now you have a UDENYCA value proposition that customers are really driving toward. And so we are very pleased with the launch progress and we're very confident in the second half of the year and our continued performance

Speaker 11

there. Got it. That's helpful. Thank you. And then can you just comment for casdoso plus taurine non small cell lung cancer?

Speaker 11

Can you comment on when we might be able to expect data from that? And then for the triplet study that's going to be starting soon in HTC, can you guys, does that have a control arm and what you're hoping to learn from that study before starting the Phase 3?

Speaker 2

Thanks, Kelly. And I'll let our Chief Medical Officer, Doctor. Raj Dias take that one. Raj?

Speaker 4

Hi, Colleen. Thank you for the question. So your first question was on non small cell lung cancer. Just a very quick reminder, obviously, it's both upon the data that we presented at ESMO IO at the end of last year showing a couple of monotherapy responses in PD L1 refractory subjects. So, the ongoing study is in combination with toripanumab, so toripanumab plus castor's ketog in second to fourth line non small cell lung cancer.

Speaker 4

This study is recruiting very well and continues to recruit and we anticipate results in next year, essentially in 2025. The second question was on hepatocellular carcinoma. So we are on track to start the HCC study late this year, which is what we've communicated previously. Obviously, this builds on the very encouraging data presented at ASCO GI earlier this year. You asked about the design.

Speaker 4

So first of all, we will be looking at a couple of doses. So the current standard of care, obviously, is atezovev and ARP Phase III study will look at the comparison against that current standard of care. But prior to that, we will look at a couple of doses of custo in combination with Tori and then also look at a contribution of components. So probably a 3rd arm as well. And then once we've done that, we'll move on into the Phase 3 as we've discussed.

Speaker 11

Great. That's helpful. Thanks for taking our questions.

Speaker 2

Question around that, Caroline?

Operator

That concludes today's question and answer session. I'd like to turn the call back to Denny Lanphier for closing remarks.

Speaker 2

Thank you, operator. Thank you all for joining us this afternoon for our call. As I indicated in my prepared remarks, we're very pleased with the company's progress broadly here in Q2. We're looking forward to another good quarter in Q3 and we look forward to seeing you all at the investment conferences.

Speaker 4

Bye bye.

Operator

This concludes today's conference call.

Speaker 1

Goodbye.

Operator

Thank you for participating. You may now disconnect.

Powered by Quartr

Key Takeaways

  • Coherus reported a strategic shift to oncology driving 10% year-over-year Q2 sales growth to $65 million, led by a streamlined portfolio after divesting its ophthalmology biosimilar.
  • The launch of LOQTORZI (lactorsi) saw key access wins with inclusion in NCCN/ASCO/TwinPath guidelines, ~100% payer coverage and a permanent J-code, and new patient starts doubled in Q2.
  • UDENYCA franchise demand rose 25% quarter-over-quarter as market share climbed to 29%, fueled by the only pegfilgrastim brand offering three device options and a stable average selling price.
  • In the pipeline, toripalumab received a positive CHMP opinion in the EU for NPC and esophageal SCC, while in-house agents casdosa-ketag and CHS-114 demonstrated early safety and biomarker activity and are advancing into combination trials.
  • Financially, Coherus ended Q2 with $159.2 million in cash after paying off debt, narrowed its net loss to $12.9 million from $42.9 million a year ago, and reaffirmed 2024 R&D/SG&A guidance of $250–$265 million.
A.I. generated. May contain errors.
Earnings Conference Call
Coherus BioSciences Q2 2024
00:00 / 00:00