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Hello everyone and welcome to the Coherus Fourth Quarter Year Ending 2024 Financial Results 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. [Operator Instructions] Please be advised that today's conference is being recorded. Now, it's my pleasure to turn the call over to the Head of Investor Relations, Jodi Sievers. Please proceed.

Thank you, Carmen. Good afternoon and welcome to Coherus BioSciences fourth quarter and full year 2024 earnings conference call. Joining me today to discuss our results are Denny Lanfear, Chief Executive Officer of Coherus; Bryan McMichael, Chief Financial Officer; Paul Reider, Chief Commercial Officer; Dr. Rosh Dias, Chief Medical Officer; Dr. Theresa LaVallee, Chief Development Officer; and Sameer Goregaoker, Senior Vice President of Immuno-Oncology Marketing. 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. Projections about future revenues, headcount reduction, statements about our ability to satisfy the closing conditions of the UDENYCA divestiture, statements about the use of proceeds from the UDENYCA divestiture, and our projected cash, future cash and cash runway, and statements about future clinical development progress. 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 about achieving the closing of the UDENYCA divestiture that are not discussed in our -- that are discussed in our press release that we issued today, as well as the documents that we filed 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 for-looking statement. All December 31, 2024 financial amounts discussed today have not been audited and are subject to change upon completion of Coherus' audited financial statements for the year ended December 31st, 2024, that will be included in Coherus' Form 10-K, which is expected to be filed with the SEC in the coming days. And now, I'll turn the call over to Denny.

Thank you, Jodi, and thank you all for joining us today on Coherus' Q4 and full year 2024 earnings call. Today, I'll provide you with a view of the progress we've made in 2024 on our key objectives, and I'll describe to you the path lies ahead as we focus on maximizing revenues with LOQTOR

Thank you, Denny. Good afternoon, everyone. We'll now review brand-specific upgrades, starting with UDENYCA. UDENYCA net product sales for Q4 were $46.3 million, an increase of 28% compared to $36.2 million for Q4 2023. For fiscal year 2024, UDENYCA net sales were $206 million, an increase of 62% compared to $127.1 million for fiscal year 2023. Pleased to report that UDENYCA's supply resumed in November with our labeling and packaging contract manufacturing organization, delivering both backlogged and planned lots to restock the distribution channel and begin fulfilling customer demand. In early January, we announced that due to strong demand in Q4 and into Q1 of this year, all three presentations of UDENYCA were being temporarily allocated. Since then, and based on individual wholesaler historical purchasing patterns, supply allocations to wholesalers and to their end customers for all three presentations of UDENYCA were removed between the end of January and the end of February. Customers who represented 97% of UDENYCA volume pre-supply interruption have returned to ordering UDENYCA, reinforcing the strength and resilience of the UDENYCA brand and the differentiated delivery presentation options that meet the unique needs of providers and patients. UDENYCA market share in Q4 was 15% with an exit share of 22%. And we remain confident that customers will continue prescribing UDENYCA with demand and market share acceleration throughout 2025 because UDENYCA is the only brand in the pegfilgrastim class that offers three product presentations, a differentiated on-body device, and broad payer coverage. Finally, as we move toward the closing of the divestiture, the UDENYCA business, the commercial team remains focused on three key priorities. First, driving UDENYCA revenue and market share beyond free supply interruption levels. Second, accelerating LOQTOR

Thank you, Paul. I'm happy to join the team. LOQTOR

Thank you, Sameer. Good afternoon. We are pleased to update you on our continued progress in 2025 with key regulatory and clinical advancements of our promising pipeline focused on our next generation and differentiated PD-1 inhibitor, toripalimab. [indiscernible] recently highlighted that not all PD-1 inhibitors are the same in a review article published in the Frontiers in Oncology journal. The publication highlighted that toripalimab uniquely binds the FG loop of the PD-1 ectodomain with high potency driven by a very slow off-rate. Clinically, this pharmacology has revealed differentiation by delivering clinical activity in combination with chemotherapy irrespective of PD-L1 expression level in multiple Phase 3 studies. The European health authorities recently approved toripalimab for first-line esophageal squamous cell carcinoma irrespective of PD-L1 expression. And in contrast, tislelizumab has recently been approved for first line esophageal squamous cell carcinoma only for patients whose tumors express PD-L1. The US FDA also recently highlighted the lack of activity of pembrolizumab, nivolumab, and tislelizumab in PD-L1 low patients in this indication and gastric cancer in an ODAC meeting last September. Toripalimab's differentiation and potency positions us well as we look to expand into additional indications in combination with novel agents. Our strategy for expanding toripalimab indications beyond MPC in the US is focused on drug supply collaboration where we evaluate toripalimab with novel mechanisms both with early and late stage compounds and prioritize tumor types such as head and neck and lung cancer in clinical trials. And internal development efforts on our pipeline of potent and selective antibodies positioned in tumor types with strong biologic rationale to establish proof of concept. Importantly, for each clinical indication that advances casdozokitug or CHS114 into a pivotal study, it also advances toripalimab into a potential new indication. From a regulatory perspective, we are progressing to plan with establishing all our drug manufacturing in the United States. Coherus has always focused on the US for development and commercial, including Made in America manufacturing. The clinical trials for casdozokitug, a IL-27 antagonist in CHS-114, a cytolytic CCR8 antibody, are designed to deliver data this year to address the FDA's project optimists and enabling favorable regulatory strategies to advance development, pending positive data into pivotal studies in 2026 and 2027. I'll now turn the call over to Dr. Dias to discuss the clinical development and pipeline data. Rosh?

Thank you, Theresa, and good afternoon. Over the next few minutes, I'll focus on the progress of the combination studies of our competitively well-positioned assets, casdozokitug and CHS-114, in combination with the toripalimab backbone, which forms the foundation of our internal development strategy. With regards to casdozo, our first -in-class IL-27 targeting antibody, our two areas of current focus are in non-small cell lung cancer and hepatocellular carcinoma. The non-small cell, our ongoing program builds upon the monotherapy responses demonstrated in previously treated PD-L1 refractory squamous cell histology in less inflamed tumors, most recently presented at ESMO IO in December 2024. Our combination study of casdozo with toripalimab continues to guide us to focus on squamous cell histology where our future focus will be. First line about cellular carcinoma dates from the atezo/bev casdoza triplet combination study was first presented mid-2023, and the final data was recently presented at ASCO GI in January ‘25. During this time period, overall response rate has increased from 27% to 38%, reflecting an increase in response rate over time. Additionally, the complete response rate has also increased from zero CRs initially to five CRs in the most recent data set representing a 17% complete response rate, which reflects a deepening of response also. These figures compare favorably with current treatment benchmarks, in particular, as the prior Phase 3 studies in HCC, IMbrave150 and HIMALAYA, have reported CR rates between 3% and 8%. And importantly, the increase in response rate and the deepening of responses over time is very encouraging as we move forward with our ongoing development program where we have switched out atezo for our own PD-1 toripalimab. This three-arm tori-bev-casdozo combination study in first line HCC is active and ongoing and randomizes a total of 72 subjects to explore two dose levels of casdozo in combination with tori-bev versus the tori-bev doublet to address project Optimus whilst at the same time aiming to provide us with a strong body of evidence to set us up for further development in Phase 2/3 in this indication. Our previously reported data has demonstrated activity irrespective of viral and non-viral etiology, which is important as our ongoing study includes sites globally where HCC historically has had varied etiologies. We anticipate having dates from our ongoing triplet study in the first half of ‘26. With regard to CHS-114, our CCR8 cytolytic antibody, our programs continue to progress in both head and neck squamous cell carcinoma and gastric cancer. As a reminder, our Phase 1 program focusing on the head and neck is in four cohorts to successfully position us for further development. Firstly, monotherapy dose escalation across advanced solid tumors. Secondly, monotherapy dose expansion of two dose levels of CHS in head and neck with paired biopsies to look at tumor biology. Thirdly, combination dose escalation of tori and CHS-114 in head and neck. And fourthly, further combination dose expansion of tori plus CHS-114 in head and neck cancer to a total of 40 subjects. We have now completed accrual in the first three cohorts of the study. We previously presented the data from the first monotherapy dose escalation cohort at ASCO last year, which demonstrated an acceptable safety profile with no DLTs, peripheral CCR rate positive T-reg depletion, and a disease stability rate of 47% in very heavily pretreated patients. We will report safety, early efficacy, and intra-tumoral biomarker data on the second and third head and neck cohorts of the study in the first half of this year. The fourth cohort of the study, the combination dose expansion cohort of tori plus CHS-114 in second line head and neck is open and ongoing. For gastric cancer, we remain on track to open our global dose expansion Phase 1b study in second line gastric gastroesophageal and esophageal adenocarcinoma this quarter to build upon the encouraging tori CCR8 data presented at ASCO ‘24 in this indication and anticipate data from this study to be available in the first half of ‘26. With that, I'll hand over to Bryan. Bryan?

Thank you, Rosh, and good afternoon, everyone. Today, I will cover the fourth quarter and annual results and provide an overview of Coherus’ transition culminating with the expected divestiture of UDENYCA, sets the company up for focus and execution solely on oncology. I will start with COGS since Paul and Sameer already covered revenue. Cost of goods sold decreased to $159 million in full year 2023 to $118 million in 2024. The change was primarily driven by $56.9 million lower COGS from the divested product, CIMERLI, and $32.9 million lower net inventory write-offs, partially offset by increased volumes of our oncology products. COGS of $33.9 million in the fourth quarter 2024 reflected the impact during the quarter from temporary supply interruption of UDENYCA and includes a $12 million charge for the write-down of UDENYCA inventory that did not meet acceptance criteria. COGS in Q4 2023 was $84.6 million and includes a $47 million charge related to slow moving YUSIMRY inventory. Turning to OpEx, total 2024 GAAP R&D and SG&A was $261 million. Comparisons of the full year 2024 and the fourth quarter to the same periods in the prior year reflect decreases in both R&D and SG&A due to savings driven by lower headcount and lower cost due to biosimilar divestitures in the first half of 2024. Specifically, research and development expense decreased 15% to $93.3 million in 2024, down from $109.4 million in 2023, and with $21.2 million for the fourth quarter of 2024, down 19% from $26.4 million in the prior year. The decreases were primarily driven by factors mentioned earlier, partially offset by increased investments in our pipeline in 2024. SG&A expenses decreased 13% to $167.7 million in 2024, down from $192 million in 2023. The fourth quarter, 2024 SG&A totaled $41.3 million, which includes $6.7 million in divestiture-related transaction costs, and was down 17% from $49.5 million in Q4 of the prior year. The decreases were primarily driven by the factors mentioned earlier. I'm pleased to report that interest expense in 2024 was $27.2 million, down 33% from $40.5 million in the prior year and $5.3 million in Q4 2024, which is about half what it was in 2023. The decreases were primarily from paying off our $250 million term loan in the first half of the year. We ended the year with $126 million in cash and cash equivalents. Denny talked about the progress on the UDENYCA divestiture, so I'd like to provide you a view on our post-transaction projections. We expect headcounts to reduce by 30% from approximately 225 employees, including 50 employees transferring to the buyer in the divestiture. The substantial majority of the company's off-balance sheet firm purchase commitments related to UDENYCA will also transition to the buyer. As previously disclosed in our filings, we expect to use tax attributes to offset all but a minor part of the gain on the transaction. Immediately following the transaction close, which is projected late this quarter or early next quarter, we expect to have $250 million in cash on the balance sheet. This amount is net of the expected payoff of $230 million convertible note, as well as a $48 million projected payoff of the UDENYCA royalty obligations. We expect this cash, combined with collections from UDENYCA Receivables net of related chargebacks, rebates, and other fees as of the divestiture close date, as well as proceeds from LOQTOR

Thank you, Bryan. Operator, that concludes our prepared remarks. We're happy to go to the Q&A session.

[Operator Instructions] One moment for our first question. And it’s from Srikripa Devarakonda with Truist Securities. Please proceed.

Hey guys, thank you so much for taking my question. With the shareholders voting tomorrow, just wanted to check if there are any hurdles at all that we can expect, like, make sure there are no surprises with respect to the UDENYCA divestiture. Also, you noted you expect to have $250 million in cash exceeding two years. Does that include the cost savings from the headcount reduction by 30% and that 30% coming from those associated with UDENYCA or is there any other optimization in terms of expenses? And then I have a follow-up question.

Thanks for your question, Kripa. With respect to the divestiture, we see no obstacles or impediments in the way of concluding that. We feel that the investors are very supportive of both the execution of the company over the past year or so, as well as the reposition of the company strategically. And we have also, as I outlined in my prepared remarks, completed SEC reviews, CFIUS, Hart-Scott-Rodino, and so on. So the only remaining, I would say the primary remaining issue is the authorization from FDA in selling the material for the new contract manufacturer And we do not believe that was dependent either. So we believe that it's pretty much going forward as planned. With respect to the two years of savings and so on, and the 30% headcount reduction, I'll let Bryan McMichael, my CFO, give you some additional color.

Sure, thanks. Thanks, Kripa, for the question. So the $250 million, the way to get to that number is if you look at our cash as of the end of the year, it was $126 million. The upfront consideration on the transaction is $483 million. And then we expect to pay off the $250 million -- $230 million convertible note, $48 million in royalties. And then you have some other cash flows related to fees and just during Q1. And so the $250 represents what we expect cash to be as of the, immediately following those transactions.

Net of those deductions. What about going forward with the headcount reductions of the savings?

So, net of the, going forward, what you can expect is, as we mentioned, we have around 225 employees as of now, and we expect to get that down to 155 employees. 50 of those employees we expect approximately to transfer to a [indiscernible], and the rest will work out over the coming year.

Thank you, Kripa. Did you have a follow-on question?

Yeah, I was just wondering about LOQTOR

Thanks for that. Maybe Sameer has a few comments of color he can provide in that. Sameer?

Sure, Denny. So, just let me give you a little bit of historical context, right? The previous guidelines put us, on the previous guidelines, there were multiple treatment options, including chemo alone, chemo plus other off-label IOs and chemo plus LOQTOR

Thank you so much.

Thank you. One moment for our next question, please. It comes from Yigal Nochomovitz with Citigroup. Please proceed.

Hi, Denny and team. Thank you. Just on the labeling and packaging for the second supplier, what exactly is the FDA looking to check the box on there to give you clearance to go through with the transaction?

Yeah. So the FDA required that we did certain test runs and validation runs with the new line. The new line required installation of certain equipment. So whenever you spool up an additional manufacturer, even though maybe like-to-like, whatever, you have to actually perform runs and make sure that the equipment is working. And so we first of all had conversations with the FDA establishing how many runs they needed, how many units per run, and so forth. The new contract manufacturer then went off and did that and completed the required validation protocols. And then we went ahead, reviewed that, and then submitted it. So we think that it's relatively straightforward, and we expect probably over the next month or so, we will hear from the FDA regarding that.

Okay, so they don't need to visit the facility. They just need to sign off on that data. Is that correct?

No, they do not need to visit the facility. They only need to review the data. Correct.

Okay. Got it. And on the CCR8, actually, I was curious, you have fairly specific timing, second quarter 2026 for the tori combo and then the phase 1b study in second line gastric. Could you just comment on how you're able to arrive at such a specific timing, more than a year away for that study? Thanks.

I think that I'll let Rosh give you a little more color on that, Yigal, but I think the shorter answer is that we have making very good progress with respect to enrolling the patients and splitting them up. And We're also dealing with a contract research organization that we have a very strong history with that's put a strong team on the product. Rosh, any further color for you, Yigal?

Yeah, I'll just -- hi, Yigal. Thanks for the question. So just two or three additional comments. So first of all, you'll recall we already, the study is in multiple parts, so we've already reported the initial data set so we have good site engagement from there. The second piece is that we will have more additional data from the second and third parts of the head and neck study this year. And then for the expansion, as you quite rightly say, we anticipate both head and neck and gastric data towards the end of the first half of next year. And I think, if you look at several of our studies, we have very good site engagement, very good engagement with physicians, and we also, for the gastric study in particular, it's a global study. So I think our feasibility has been pretty tight and we have really engaged the right sites which have these patients. So our projections are fundamentally based on cytochrome projections.

The other comment that I would offer you, Yigal, is that management reviews these regularly. We just had another review in this last week. So we realized the importance of getting the data in a timely fashion. We’re quite focused on it. And I think execution along these lines is one of our strong points. So happy to keep you informed.

Okay, thanks. Last one quickly on LOQTOR

Yeah, that's great. Sameer, would you like to comment for Yigal on the pricing?

Yeah, I'll take that. Hi, Yigal. Yeah, we did take a price increase. It was around 2.46%.

Okay, thank you.

One moment for our next question, please. And it comes from the line of Colleen Kusy with Baird. Please proceed.

Hi, good afternoon. Thanks for taking our questions and congrats on the progress. For the head and neck cancer data in the first half of this year, can you just kind of help us set expectations on what to expect there, how many patients, and how much follow-up?

Hey, Colleen, thanks. Rosh, do you want to give a little color to Colleen?

Yeah, absolutely. Hi, Colleen. So yeah, we're expecting we will be reporting out data in the first half of this year at one of the major conferences. A little bit of data from first part. Also, more data from the second and third part. So essentially, all in all, we'll have around 30, 35 patients' worth of data. And what you should expect is safety, early efficacy, and also we've got some intra-tumoral biomarker data as well that we anticipate presenting as well.

Great. And then for the casdozo-tori combo in second fourth line, non-small cell lung cancer, could you just kind of help us set expectations for that data readout as well please?

Yeah. So we'll have emerging data as we move through the year. I'm not going to comment too much on specific enrollment and results because we still do have subjects who are still on therapy in the stage one of the two stage, SAMA two stage design. But what I will say is that we anticipate focusing in on squamous specifically moving forwards, which is of course, as you know, Colleen, where we have seen our signals thus far.

Great. Thank you for taking our questions.

Thank you. Our next question is from Michael Nedelcovych with TD Cowen. Please proceed.

Hi. Thank you for the question. I have one as it relates to the casdozo development plan in non-small cell lung cancer. So it sounds like you're moving forward in squamous. I was just curious, what is the next step? Is it a randomized Phase 2? Is there any chance you could move to a pivotal in late line non-small cell lung cancer? And what is contemplated in your cash runway guidance as it relates to casdozo development in lung cancer? Thank you.

Hi, Michael. So I'll take the first part of that question. So our anticipation is that Once we have completed a robust data set in the combination of toripalimab with casdozo in non-small cell, as I say, the future focus for that is likely to be on squamous cell, we'll then move on into a Phase 2, 3. So the Phase 3 study will be a standard Phase 3 and will be against the current standard of care, which is docetaxel. And we talked a little bit last time about the response rates that one sees typically with docetaxel. And while I won't comment on what exactly we, what bar we're expecting to see, you know what the docetaxel overall response rates are. So the subsequent Phase 3 study will be against the standard care docetaxel. Regarding funding of the Phase 3, that's not within the window of the two-year guidance that we've gone with so far, but I think there's a number of options to proceed with that given the data. And I would also indicate that out three to four years during that such time, we think that we have toripalimab pretty much at full force in the nasopharyngeal cancer space with $150 million to $200 million.

Great. Thank you.

Thanks, Michael.

Thank you. One moment for our next question. That comes from the line of Brian Cheng with JPMorgan. Please proceed.

Hey guys, thanks for taking our questions this afternoon. Maybe the first one is for Paul. On LOQTOR

Yeah, well, thank you for your question on that, Brian. I think Sameer can probably provide you a little color on that.

Yeah, so let me start with the question about the stickiness of LOQTOR

Thanks, Brian. Did you have a follow-up?

Yeah, and then maybe just one quick one. Related to the Phase I CCR8-tori combo data sometime later this year. I just want to get a better sense of what we should expect from the intratumor biopsy data. Specifically, what would be considered good data that you view as further supportive for your ongoing work in head and neck?

Great question. Maybe Dr. LaVallee can handle that one for you. Theresa?

Yeah, Brian, thanks for that question. There are a couple things we're looking for. First, we've shown robust depletion of CCR8 positive T-regs in the periphery that sustained over the dosing cycle. We want to be able to see that in the tumor. And secondly, what's been demonstrated in preclinical models is that removal of the immune-suppressive cells, the CCR8-positive T-reg, there's a broad infiltration of CD8 T-cells. So that ratio of immune-suppressive to immune activating cell is very important. And a number of studies with PD-1 and CTLA-4 have been done and shown efficacy is associated with high CD8 T-cells in the tumor after treatment. So we're looking for an increase in the CD8 cells to tip the balance to immune-activated.

Got it. Thank you so much.

Thank you, Theresa. Thanks, Brian.

Thank you. Our next question is from Douglas Tsao with H.C. Wainwright. Please proceed. Douglas, your line is open.

Sorry about that. I was on mute. My apologies. Thanks for taking the questions and congrats on the progress. I guess just one follow-up for me. I'm just curious in terms for LOQTOR

Thanks, Doug. So your question is how much off-label other PD-1s without label and how long will it take us before we really embed LOQTOR

Yeah, and maybe what are some of the things that you need to do to have that happen?

Great, so our business opportunity is divided between the academic and hospital setting and the community setting. In the academic setting, there's a pretty good awareness, especially the head and neck cancer specialist, there's a pretty good awareness of the guidelines and the data for LOQTOR

And I guess just as a follow-up, I mean, do you anticipate it being an easier challenge, sort of easier task in the academic centers? Is it the community where you have more work to do?

Yeah, I think we have to be -- we can't just focus on the academic centers. We obviously want to get all the academic centers on board. We want to drive usage in hospital settings. But if we want to establish ourselves as a center of care, there's a lot of MPC use, treatment of MPC in the community. So we have to make inroads into the community. And we are committed to doing that, both through our salesforce, but also through digital channels. So we've got to be successful in both those settings.

Okay, great, thank you.

Thanks, Doug.

And thank you. And this concludes our Q&A session. I will turn it back to Denny Lanfear for his final comments.

Thank you, operator. And thank you all for joining us today as Coherus achieves, I should say, is about to achieve really a very strategic milestone, assisting the company as a commercial stage innovative oncology company with an excellent product in toripalimab and a very, very promising pipeline. We will be at IO360 later this month in Boston and look forward to seeing you all there. Thank you very much.