Patrick O'Brien - Senior Vice President, Investor Relations Denny Lanfear - President, Chairman and CEO Barbara Finck - Chief Medical Officer Jean Viret - Chief Financial Officer Matt Hooper - EVP and General Counsel Vladimir Vexler - EVP, Analytical and Translational Sciences.

Mohit Bansal - Citigroup Morgan Williams - Barclays Tyler Van Buren - Cowen and Company Chris Schott - JPMorgan.

Ladies and gentlemen, thank you for standing by. And welcome to the Coherus BioSciences Second Quarter Earnings Conference Call. My name is Katharine, and I will be your conference operator for today’s call. At this time, all participants are in a listen-only mode. And as a reminder, this conference call is being recorded.

I would now like to turn the call over to Patrick O'Brien, Senior Vice President of Investor Relations. Please go ahead..

Thank you, Katharine, and good afternoon, everyone. After close of market, we issued a second quarter financial results press release. This release can be found on the Coherus BioSciences website.

Joining me for today’s call will be Denny Lanfear, President, CEO and Chairman; Barbara Finck, Chief Medical Officer; Jean Viret, CFO; Matt Hooper, EVP and General Counsel; and Vladimir Vexler, EVP, Analytical and Translational Sciences.

Before, we being our formal remarks, I’d like to remind you that we will be making forward-looking statements with respect to product development plans all of which involve certain assumptions, risks and uncertainties that are beyond our control and could cause actual results to differ from these statements.

A description of these risks can be found on our most recent Form 10-Q on filed with the SEC. In addition, Coherus BioSciences does not undertake any obligation to update any forward-looking statements made during this call. I would now like to turn the call over to Denny..

Thank you, Patrick and thank you all for joining us today. Today we would like to talk about three key areas for you. First of all, we will talk about our product development update, which of course, will include an update on the CHS-1701 CRO.

Secondarily, we will discuss our recently filed IPR for Enbrel and will be joined there by Matt Hooper, the company’s General Counsel. Lastly, the company has made very good progress towards our financial goals and those will be presented by our CFO, Dr. Jean Viret.

Now, in terms of the CRO and the development of things there, I would point out that we have successfully completed redevelopment of the immunogenicity assay, including with backup capabilities consistent with the expectations for higher sensitivity as per the FDA’s request. This assay is performing as required by the agency.

The next step is assay validation, followed by the processing of the sample. We continue to anticipate meeting with the FDA in Q3, Q4 2017 and scheduling is still pending, but timing will be aligned with BLA resubmission by the end of the year as previously guided.

We are happy to take additional questions during QA on this particular aspect of the complete response letter. As you recall the second part of the complete response letter address certain manufacturing and process-related requests. I am happy to update you on progress there.

Pursuant to those we have made very good progress consistent with our expectations in previous guidance with respect to certain additional manufacturing and relief testing reports and information as requested by FDA.

As was indicated previously, we are compiling quarterly illiquidity data as requested and continue to believe this will be completed prior to BLA efforts, thus to say this remains off the critical path.

We do not foresee and have not been requested to perform additional process qualification lots or other exercises which would exceed our currently planned timing. Now in terms of the next steps for the CRO, we will continue to guide through late Q4 2017 BLA resubmission.

We will inform you upon FDA acknowledgment of the resubmission, which should be 30 days after that date. And as you know, normal FDA review timing for this resubmission is six months. Now in terms of the CHS-1701 MAA in European update, efforts on the EU and the U.S. filings are progressing in parallel.

There are few factors that are impacting the EMA review schedule and the timing for an anticipated positive opinion. First, certain inspections, which comprise the critical path for the review are now scheduled for late summer and have been subject to EMA availability in their own -- their own scheduling constraints.

Secondarily let me point out that EMA and FDA appeared to be taking similar approaches with respect to the immunogenicity study and data. Thus we are currently harmonizing our approach in data sets globally through regulators. Secondly, as previously indicated, we anticipate completion of this harmonization by late 2017.

We expect to have further discussions with EMA around timing, we will update you accordingly. This global harmonization to both health authorities may place the EMA positive opinion in roughly the same timeframe as the target FDA approval the guidance is worth coming.

Now in terms of CHS-1420, the company's Humira biosimilar and on the legal front we have got a very good quarter. As you know, we successfully invalidated three Abbvie patents 135, 680 and 987. We have also had some positive developments with a formulation IP portfolio, which I will cover subsequently.

In terms of CHS-1420 we are targeting the BLA filing for late first half of 2018. And in terms of the change of the CMOs, we have now identified an alternative self-finish facility that CHS-1420, where we have high confidence we’ll meet our regulatory expectations. The MAA will occur directly after the U.S. filing.

This is primarily because the same drug product CMO is being used to supply both EU and the U.S. markets. We look forward to the September 12th institution decisions and patent office on our four IPR petitions, regarding AbbVie’s 619 patent covering non-buffer formulations. These decisions are expected to impact ongoing partnering discussions.

Also the PTAB decisions on the 619 IPRs will form our strategy regarding conduct of an additional human PK study better to say which formulation to use in that study. Let me give you an update on the CHS-1420 formulation. We are successfully advancing complex and robust adalimumab formulation patent portfolio to protect our innovations.

We believe our patents move forward for competitive advantage against other biosimilars seeking work around the Abbvie patents. Our platform includes both buffer and non-buffer formulations. In terms of the buffer formulations, we now have five issued U.S.

patents and three more of our patent applications have been allowed and will issue in the coming months. For buffer free formulations we now have one issued U.S. patent, with six additional allowed U.S. patent applications expected to issue soon covering a variety of non-buffer formulations.

For these allowed applications we will issue over the next three weeks and are generally directed to various combinations of excipients in the non-buffer adalimumab formulation. All of our public applications and patents are publicly available and can be viewed on the USPTO website.

Now as previously discussed the company is prioritizing progress of CHS-1701 and the CHS-1420 filing. For CHS-0214 the company’s Enbrel biosimilar, we are refocusing on the U.S. market and the company's General Counsel, Matt Hooper, will discuss the IPR and that news momentarily.

If our overall anti-TNF IP strategy is successful, obviously, we could have two anti-TNF products in the most attractive market that is here in the U.S. Let me remind you that the clinical program for CHS-0214 has been conducted fully in the office of U.S. FDA.

Now the company's General Counsel, Matt Hooper will discuss the [ph] Broncos (08:04) IPR news and its implications for CHS-0214.

Matt?.

Thank you, Denny. On Friday, we filed an IPR against U.S. patent 8,163,522. This patent is owned by Roche, but it’s controlled exclusively by Amgen. Before I comment on the IPR, I want to just provide a little bit of brief background on this.

I think you all know the etanercept protein is a fusion protein that combines the TNFR receptor with the constant region of an IgG1 antibody. This was a follow-on development based on the original discovery of the TNFR receptor, which was discovered and patented by Smith and Immunex covering the ability to flop TNF-alpha.

These two patents are companion patents, who are based on the same specification, the 522 patent is directed to a method of making this fusion protein and the 182 patent, which we expect to file shortly is directed to the fusion protein itself.

Now as you know, two years ago Kyle Bass and Hayman Capital under the entity of Coalition for Affordable Drugs filed an IPR against the 522 patent. And I think the question would come up is, what are we doing differently here with deficiencies, have we been able to correct in the Bass IPR.

First, I would point out, that even Roche, the owner of the patent admitted that the Bass IPR took a less than rigorous approach. We certainly agree.

At a high level, our view of the deficiencies of the original IPR by Bass, is that it did not identify the Bass prior art which we believe we have and the Bass IPR entirely failed to address the patent owner's argument that etanercept somehow achieves unexpected or surprising results.

Now our IPR is fundamentally different in correcting these deficiencies. First, we rely on two prior art publications that Bass failed to capitalize on.

The publications that we use in the IPR demonstrate that it was in fact entirely obvious to build a fusion protein like etanercept using the exact portion of the IgG constant region as described in the 522 patent. That was a failing that the Board identified in Bass’s petition and I think we have thoroughly corrected that.

Secondly, there was a deficiency in that the Bass IPR failed to address the argument of the patent owner that there was somehow unexpected result in this fusion protein. We have worked with a renowned expert who is a declarant in our IPR, Dr. Dennis Burton, who is a Professor at Scripps Research Institute.

Now Bass failed to challenge Roche's claim of unexpected results, but Dr. Burton has address that very thoroughly and break those arguments down.

We demonstrate that the vast majority of the results that are achieved with this protein are in fact exactly what scientist expected and the remainder of the data provided by the patent owner are, in fact, based on highly questionable data.

We expect the Board will appreciate these essential differences and will adopt the compelling case we put together here..

Thank you. Thank you very much, Matt. The company's finances will now be reviewed by Dr. Jean Viret, our Chief Financial Officer.

Jean?.

Thank you, Denny. Let me give you an update on our financial position and results. Cash, cash equivalents and short-term investments and marketable securities totaled $118.3 million as of June 30, 2017, compared to $174.8 million as of March 31, 2017.

Cash used in operation was down 24% to $55.6 million in the second quarter of 2017, as compared to $73.3 million in the first quarter of 2017. We anticipate cash usage of approximately $40 million to $45 million per quarter in the second half of 2017 and $30 million to $35 million per quarter in the first half of 2018 prior to approval.

Total revenue for the second quarter of 2017 was $1.4 million, as compared to $14.1 million in the second quarter of 2016. Total revenue for the six months ended June 30, 2017 was $1.6 million, as compared to $26.4 million for the same period in 2016.

The decrease for the same period in 2016 was mainly attributable to the termination of an agreement for CHS-0214 with Shire whereupon Coherus regained rights to CHS-0214 in Europe in the third quarter of 2016. Research and development expenses for the second quarter of 2017 were $34.5 million, as compared to $65.5 million for the same period in 2016.

R&D expenses for the six months ended June 30, 2017 were $88.3 million, as compared to $130.9 million for the same period in 2016. Decreases in R&D expenses were mainly attributable to the completion of Phase 3 and Phase 1 clinical studies for CHS-0214 and CHS-1420 in 2016 and a decrease in other development costs for our pipeline products.

General and administrative expenses for the second quarter of 2017 were $23.5 million, as compared to $11.3 million for the same period in 2016. G&A expenses for the six months ended June 30, 2017 were $42.3 million, as compared to $22.7 million for the same period in 2016.

Changes in G&A expenses were mainly attributable to legal and other professional fees to support intellectual property strategy and personnel-related costs to support our CHS-1701 pre-commercial activities in the first six months of 2017.

Net loss attributable to Coherus for the second quarter of 2017 was $55.3 million or $1.08 per share, compared to $70 million or $1.72 per share for the same period in 2016. We will now turn the call to Q&A. Operator, you may open the call to questions..

Thanks, Jean..

[Operator Instructions] Our first question comes from Mohit Bansal with Citigroup. Your line is open..

Great. Thanks for taking my question and congrats on the progress with regards to assay.

My question is regarding the meeting you are having with the FDA, could you help us understand what do you plan to discuss in this meeting with the FDA and once you file, is it fair to assume that FDA agreed with the assay and the data there, and therefore, you're filing it? And I have a follow-up. Thank you..

Hi, Mohit. Thank you very much for your question. I’ll let Dr. Vladimir Vexler, the company’s Executive Vice President of Analytical and Translational Sciences offer additional detail. But we think it's very important that we review with the FDA our plan to address all the questions that they raise.

We intend to look forward with meeting -- our meeting in which we review each of those questions and the company's replies and the work that we have done to satisfy those particular results. I think that it’s fair to say pursuant to the second half your question. If the company goes ahead and files a reply with the FDA we will do so.

Having reviewed with the FDA and come to concurrence with them on the results and have received appropriate positive feedback from the agency on that. So that will give us confidence that the FDA is tracking with us as far as those replies. And Dr.

Vexler, do you have any additional comments regarding this particular issue for Mohit?.

I just would reiterate that we in fact have successfully developed the assay, which we believe those are the expectation as FDA pointed out. The focus will be to make sure that we are interacting with FDA and they except our assay moving forward..

Thank you, Mohit..

Great. Thanks. And one more question if I may ask regarding the cash. So you have mentioned a lot of cuts here, but still if I do the math from the point you have the cash for that, you are still couple of month short from the point where you could have a potential approval in Europe and U.S.

So, at this point, I mean, what other options you are thinking about and then partnership discussions could some of that could happen before -- later half the year, early next year?.

Yes. I mean, these numbers are, obviously we can’t control over, so we will use the cash as we said and we perfectly conscious of the fact that we want to last for at least 12 months, that’s your question.

Yes, we anticipate to have discussions for partnering particularly after 619 is instituted, that would be an area where we will develop our efforts and pending results we have on our small molecule 131 we also expect to have partnering discussions of development there.

So we're managing our cash very carefully and we also managing ways to receive cash..

Great. Thank you..

Thanks, Mohit..

Thank you. Our next question comes from Alethia Young with Credit Suisse. Your line is open..

Hey, guys. This is [ph] Eli (19:06) on for Alethia. Thanks for taking the question. Can you give us a little bit more color on the path forward for your Humira biosimilar program, specifically when do you expect to start the PK study for your other formulations that are impacted by the 166 patent.

I know you mentioned 619 IPR, but can you walk us through the potential pathways forward for the program depending on the outcome of this IPR? Thanks..

Yeah. Hi. Thank you for the question. I think that the 619 IPR will determine which formulation we take forward. As you know we have disclosed that we have developed a number of formulations, both buffer and non-buffer.

So the company would not disclose which formulations it will proceed with under the scenario in which 619 is not successful for strategic and competitive reasons. However, clearly, if the 619 IPR is successfully instituted then we significantly on our selection of a PK study to proceed with.

You can also factor into your thinking that PK studies take approximately six months to execute and to report back. So that put us within the timeframe of the filing out in the end of the first half of 2018. But forgive us for not giving a greater color on our actual strategy pursuing with this for competitive reasons..

Thank you. And our next question comes from Morgan Williams with Barclays. Your line is open..

Hi. Good afternoon. Thanks for taking the questions. So first on the etanercept IPR that you filed the 522 patent, so how do you explain kind of the shift in thinking on the etanercept IP state. I know previously you have said that you wouldn't challenge the patent but instead wait on the outcome of the Sandoz District Court trial.

Since that trial is scheduled for early next year, is there a reason that you think the District Court is not the most prudent path to take in terms of overturning these two patents? And then, secondly, on the CHS-1701 EMA data requests, you alluded to a similar frame of mind at the FDA.

Is it the same assay that’s been questioned and kind of on that same point of thinking? Is the fire that could have potentially prompted the FDA to request additional analysis also -- today also have a pegfilgrastim filing and the EMA?.

Hi, Morgan. Thanks for those two questions. Let me take a last one first pursuant to CHS-1701 EU MAA versus U.S. and then I'll let Matt Hooper talk about issues regarding the timing and the approach of the CHS-0214 [ph] block out (22:16) IPR.

Although I -- and we has state clearly that I do not believe we have offered guidance previously that we would not challenge block out, I think, we've always reserve that right. Pursuant to CHS-1701 though.

We -- in having our communications with the regulators, it became clear that the regulators are seeking harmonization in a number of areas across the Atlantic, whether it is inspection of facilities or other thing, they seek to be, I think, it's somewhat stuck with each other.

The issue is that if you develop information for one set of regulatory authorities. It’s very easy for the others set of regulatory authorities to request that additional information.

So I think it’s less an issue of the regulators in the EU, questioning the results of any study, but if you do additional analyses, they very reasonably would want to be updated on those analyses and take a look at it. So, that that's really just the long and short of it on both side. Maybe Vladimir wants to offer a few more comments.

Vlad anything further on this?.

No. I think the [inaudible] (23:30) all went really well..

Yeah. Yeah. So we think that the Europeans have a slightly different orientation towards a number of things, whether it’s pharmacokinetic studies or immunogenicity studies or whatever. But we wouldn't read too much into those and they were just like each agency would like to see what the other agency is doing. They tend to stay together.

Now pursuant to CHS-0214, Bass Kyle’s IPR and so on, Matt Hooper, can address your question there.

Matt?.

Hi, Morgan. Thanks for the question. So when the IPR filed by Bass was filed in 2015. We saw the non-institution decision in early 2016. We want to kind of keep our eye on that and understand the issues around that patent, with -- obviously with an eye toward the potential for mounting a challenge.

I don’t -- as Denny said, we never said, we would or would not. But in terms of sort of the why now the strategic thinking around that is probably goes to a deeper layer on our strategies than we are appeared to disclose. But we just thought that the time was appropriate to mount that challenge and we believe we have done so very effectively..

Yeah. Morgan, the other comment I would make is, I think, that we’ve gained increased proficiency with IPRs as time has gone on. Certainly, we were successful with the 135 IPR with Abbvie, and I think, that we’ve watched IPR that have been successful and not successful. We are very well aware of, I think, how the patent office looks at this.

So, as Matt said, there is a variety of reasons, most of which are confidential and strategic why we did this now, but we've kept the close eye on the U.S. Enbrel market. We were very careful to retain rights in that market when this asset was out licensed globally to Baxalta.

So, I think, it’s a case really of an appropriate timing and strategy coming to fruition. Just as we do with our other filings and regarding the Humira formulations and so on..

Okay. Thank you all for your answers. That’s helpful..

All right..

Thank you. Our next question comes from Ian Somaiya with BMO Capital Markets. Your line is open..

Yeah. Hi. This is [ph] Steve (25:58) on for Ian. Thanks for taking the questions.

On the Enbrel biosimilar overall global strategy there, can you just help us understand the difference between Enbrel and Humira biosimilars in terms of manufacturing costs and margins, and any other key factors that you briefly alluded in 8-K following getting back the rights in Japan?.

Yeah. Thank you for that. So, Dr. Barbara Finck, the company's Chief Medical Officer can comment subsequently on how Enbrel and Humira are slightly different in terms of the various therapeutic markets that they address.

However, I would say one of the prime differences in terms of these two products is that Enbrel is administered weekly and Humira is administered by weekly, and roughly the same amount. So you use a roughly about half as much Humira as you do Enbrel, and therefore, you have an inherent COGS disadvantage that goes into an Enbrrel biosimilar.

Secondarily it’s arguably easier to produce a molecule antibody like Humira in cell culture than it is a fusion protein, which is a much more novel non-natural construct. So the Enbrel process, because of the nature of the fusion protein it’s simply more difficult to make.

Pursuant to your point about Japan and the COGS there, Japanese reimbursement policy which was such that it made it more difficult to make a profitable enterprise out of Enbrel in Japan and to a lesser degree Europe. However, the U.S.

is certainly a lucrative market for both of these molecules, both Humira and Enbrel, and therefore, a very attractive market, right, which is why we retained it ourselves. So we don't think that COGS is an issue in the U.S.

with Enbrel and we also think that there is an advantage of having both an Enbrel biosimilar and the Humira biosimilar together if our intellectual property strategy is successful. Barbara, could you just give the comment briefly on the therapeutic differences between Enbrel and Humira..

Right. So, I think, it's important to think about having -- ability to have two of these products in the U.S. market. They are sort of different when you think about their use therapeutic. Enbrel and Humira both work in rheumatoid arthritis, psoriasis and psoriatic arthritis.

But Humira has the additional indication of inflammatory bowel disease Crohn's and ulcerative colitis in a number of other indications. In the primary use and such as an RA, because people go to bowel, not bowel, sort of biologic early on, they try to choose one that has low immunogenicity and fewer side effects, and that’s Enbrel.

But as you get into more severe diseases or prolonged period of time some people then stopped responding, you have to transfer them over to another TNF inhibitor and that's usually Humira. So for some indication you start with Humira and other indication you start with Enbrel, because of its decrease in terms of immunogenicity and adverse events.

But it's very nice to have both in the bag, because you can then be available when it's time to switch people or to have new start on each of these indications..

I hope that answer your question. Thank you for….

Yeah. No. That’s very helpful.

If I can just ask quick follow-up housekeeping question on IPR, does any content or ruling related to the Bass IPR, have any impact on how this new one will proceed in quarter, is it basically hitting the reset button and getting a clean slate to proceed with the arguments that you have made in the new IPR?.

Steve, it would be the latter. It’s a complete reset..

Okay. Perfect. Thank you..

Thank you. [Operator Instructions] And our next question comes from Tyler Van Buren with Cowen and Company. Your line is open..

Hi. Good afternoon. Thanks for taking my questions. Just -- the first one just a point of clarification on the CHS-1701 manufacturing process that’s ongoing and good to hear that you made progress.

I guess and you mentioned that’s off the critical path, maybe just a little more clarity with respect to when we could resolution of that, is it something that will be resubmitted along with the immunogenicity assay and data, and we will just have to wait for a final potential approval or could we potentially hear of a resolution prior to resubmission or prior to approval and what’s kind of the gaining items there?.

Hi. Thanks for question, Tyler. First, we would resubmit the entire application together. That is the immunogenicity component plus the process/analytical manufacturing..

Okay..

They would both go in together and it would be reviewed the whole and the package would be dealt with the FDA in that context. The point that we're making earlier is that the process and the analytical part of the questions that came up in the response letter were less time consuming actually to deal with and address than the analytical portion.

With the analytical -- we have got -- we first successfully redeveloped the assay then validated, then process the samples, generator report, QC the data and then submit. That’s take a little longer period of time. So that’s the critical path time driver.

And the point that we're making is within that timeframe we can straightforwardly address the additional analytical reports analyses and things that the FDA asked us about. But those are -- characterize those earlier as reasonably straightforward and straightforwardly addressable. So that’s we intended to. That's really what we are going to do.

I think -- for your insight, I think, probably keep an eye on our progress with the immunogenicity assay there, it probably the more straightforward and as you point out we are happy to report data of the redevelopment of the assay is now complete, it’s performing as the FDA requested, so we are moving on the validation.

So that’s putting a big one behind us and you feel good about that..

Okay. That’s helpful. Thank you. And just follow-up final question on the CHS-0214 program in the Broncos IPR strategy, it was very helpful to hear that on the call.

Assuming that, I guess, both of these IPRs are successful, can you just give us an understanding of if there is any hurdles that are remaining or if you guys would be free to launch or what else we should take in the consideration there?.

Yeah. That’s good question. I’ll let Matt Hooper, our General Counsel to address that..

Thanks, Tyler. If we can get these patents in the IPR, I think the -- any remaining hurdles are entirely manageable. I think you're going to the patent then you are going to potentially see some peripheral patents, because that's just -- that the -- that’s the way it has been done right now.

But for the most part this is a significant impediment that once removed with the Bass..

Yeah. I would just say, there is one or two processing that we have sites up as is our custom that you have seen us do with CHS-1701 and other products. We have our owned formulation, intellectual property already that does not bear upon Amgen, so formulation, that’s the work clear there.

This isn’t the product that has big formulation barriers like the Humira products which -- that’s primary buffer there of course is formulation. I agree with Matt. It’s a relatively clear field after these two patents are addressed..

Okay..

Somewhat different, Amgen, Amgen embraced somewhat different blocking strategies then Abbvie did work. Amgen has basically two very large patents which comprise the instruction whereas Abbvie erected various with many, many patents jump over..

Okay. That’s helpful. Thank you.

And maybe just a follow-up and I apologies for being kind of lot of question, but maybe just some brief comments on the Supreme Court review of the IPR process, given that you guys clearly have a very unique perspective and a lot of experience with it?.

Lot of experience with it..

Tyler, right. I have to confess I have no idea how the Supreme Court is going to handle this issue. I can think of that is the complexity of a decision that would somehow undo the IPR process.

How that would apply, would be retroactive, would there be some kind of a grand filing, I mean, a lot of -- there has been a lot of changes in conduct based on IPR decision that have come down successfully. I -- it is hard to understand exactly how the Supreme Court is going to deal with this issue..

Yeah..

So I’d just basically say, yeah, we are declining from second guessing of the Supreme Court..

Yeah..

But watch carefully..

Yeah. Great. Thanks so much guys..

Thank you..

Thank you. And we have time for one more question and that question is from Chris Schott with JPMorgan. Your line is open..

Great. Thanks very much for the questions. First one is the commercial question as we think about the TNFs, just potentially in the biosimilar Remicade uptick thus far in the U.S. I think, Pfizer on this -- on the call last week talked about it’s been more difficult to secure commercial access of the product growth with the expectation.

As you think about just the opportunity once you get through IP for CHS-1420, does that factor in it all? There is one follow-up after that..

So, I am going to decline the comment substantial on that. We are focused primarily as you know on the intellectual property.

But it’s suffice to say that all the peers we have talked to regarding CHS-1420 have expressed a fair amount of enthusiasm for that product getting on the market and I would be cautious about drawing parallels between the Remicade marketing situation, which is the fusible products and so on and the Humira product, which I think is a very different one.

But please go ahead with your second question, Chris?.

Sure.

And just -- I want to follow on earlier question, just to the extent that the 619 IPR is not instituted, is there still a pathway for 2019 launch, I know you get the much of the formulations in process or at that point would be thinking about something more in the early 2020s, if again in that scenario where it’s not instituted?.

Hi, Chris. It’s Matt. I think that the scenario for the 2019 launch is still intact. We are looking for easy kills in the IPR. In the absence of that we are going to attack these patents in District Court. We think the invalidity arguments that can be raised can be effectively against in District Court litigation and we are prepared to do that.

But we see the IPRs an efficient first attempt to clear hurdle in a very efficient and cost-effective manner that doesn't require costly litigation, so I….

Yeah. And Chris, I would add that, we would be happy to revisit that question on the other side of September 12th and see where we are on the 619 IPR and how things look at that point..

Fair enough. Thanks very much for the questions..

Thanks, Chris..

With no additional questions, I would now like to turn the call back over to Mr. Lanfear for closing comments..

Hi. Thank you very much and thank you all for joining us on the call this afternoon. We are happy to report, I think, we have made some very good progress this quarter pursuant to the CRO for CHS-1701. The assays up in places, it’s really like the FDA want.

The other part of that it would be process and the analytical portion I believe is also well in hand. We continue to make good progress on the intellectual property aspect of our business particularly with the anti-TNF is in validation of the 135 and other patents. I think it was a substantial milestone.

The intellectual property for the formulations continues to go forward. And then, lastly, we have made very good progress on the financial side of the business, we have lowered the burn effectively from Q1 to Q2 from $76 million to about $35 million.

We are in good position to lower it further for Q3 and Q4 and into 2018 as we focus on the CHS-1701 approval midyear next year. Thank you all for joining us and we'll look forward to chatting with you all again on the call. Bye-bye..

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone have a great day..