10-K: Coherus BioSciences Announces 2024 Results, Strategic Shift with UDENYCA Sale

Sentiment:

Annual Report 17 March 2025 4:28 PM

📋All filings for Coherus Biosciences, INC

Coherus BioSciences reports 2024 financials and outlines strategic focus on immuno-oncology following planned UDENYCA divestiture.

Delay expectedThe third-party labeling and packaging CMO for UDENYCA delayed production of UDENYCA due to over-commitments and capacity constraints.

Summary

Coherus BioSciences is a commercial-stage biopharmaceutical company shifting focus to innovative immunotherapies for cancer.
The company's portfolio includes UDENYCA (pegfilgrastim-cbqv) and LOQTORZI (toripalimab-tpzi).
On December 2, 2024, Coherus entered an agreement to sell its UDENYCA franchise to Intas Pharmaceuticals for $483.4 million in cash, plus potential earnout payments.
The UDENYCA sale is expected to close late in the first quarter or early in the second quarter of 2025.
Proceeds from the UDENYCA sale will be used to repay debt, buy out royalty obligations, and for working capital.
LOQTORZI, launched in the U.S. on January 2, 2024, is approved for certain nasopharyngeal carcinoma (NPC) treatments.
The company is developing an immuno-oncology pipeline, including casdozokitug (CHS-388) and CHS-114, with clinical trials underway.
Coherus reported UDENYCA net product sales of $206.0 million in 2024.
The company had $126.0 million in cash, cash equivalents, and marketable securities as of December 31, 2024.
The company anticipates that its existing cash and cash equivalents, investments, cash collected from product sales and cash proceeds from the UDENYCA Sale (assuming it is consummated) will be sufficient to fund its current operations for the foreseeable future.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. The UDENYCA sale is a positive development, but the company faces challenges in the competitive landscape and has identified a material weakness in its internal control over financial reporting.

Positives

The UDENYCA sale provides a significant influx of capital to repay debt and invest in the immuno-oncology pipeline.
LOQTORZI's FDA approval and launch provide a new revenue stream and growth opportunity.
The company has a diversified immuno-oncology pipeline with multiple clinical trials underway.
The company has a strong scientific, clinical, and regulatory expertise in the United States.

Negatives

The company has a limited history of profitability and has incurred net losses in recent years.
The company is dependent on the commercial success of LOQTORZI and its pipeline product candidates.
The company faces significant competition in the biosimilar and immuno-oncology markets.
The company relies on third parties for manufacturing and clinical trials.
A temporary UDENYCA supply interruption had a significant impact on the business in 2024.

Risks

The closing of the UDENYCA Sale is subject to conditions and may not be completed.
The company may not receive the earnout payments from the UDENYCA sale.
The company may need to raise additional capital in the future.
The company's product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval.
The company may infringe or be alleged to infringe intellectual property rights of third parties.
The company is subject to a multitude of manufacturing risks and the risks of inaccurately forecasting sales of its products.
The continuation of the war between Russia and Ukraine and conflicts in the Middle East may exacerbate certain risks the company faces.
The company has identified a material weakness in its internal control over financial reporting.

Future Outlook

Coherus expects to focus on its immuno-oncology portfolio and leverage its commercial capabilities to advance LOQTORZI and other product candidates. The company anticipates the UDENYCA Sale to close late in the first quarter or early in the second quarter of 2025 and expects to use the proceeds to repay debt, buy out royalty obligations, and for working capital.

Management Comments

Management expects to further leverage these capabilities as it continues to advance its immuno-oncology franchise.
Management plans to focus on maintaining business continuity for both UDENYCA and LOQTORZI customers and ensure patients continue to access our products without disruption.
Management plans to focus on maintaining business continuity for both our UDENYCA and LOQTORZI customers and ensure patients continue to access our products without disruption.

Industry Context

The document highlights the competitive landscape in both the biosimilar and immuno-oncology markets, noting the presence of established players and the potential for new entrants. The company emphasizes its strategy to compete on the basis of price, reimbursement, and product differentiation.

Comparison to Industry Standards

The document mentions key competitors for LOQTORZI, including Keytruda (Merck), Opdivo (BMS), Tecentriq (Genentech), Imfinzi (AstraZeneca), Bavencio (EMD Serono/Pfizer), Libtayo (Regeneron), Jemperli (GlaxoSmithKline), and TEVIMBRA (BeiGene), indicating the established presence of PD-1/PD-L1 inhibitors in the market.
For UDENYCA, competitors include Amgen, Biocon, Sandoz, Pfizer, Spectrum, Amneal, and Fresenius, reflecting the competitive nature of the pegfilgrastim biosimilar market.
The document references Clarivate/Decision Resource Group data, indicating an expected 10.6% annual growth in the HNSCC therapy market, with PD-1 inhibitors projected to be the sales-leading drug class by 2033, suggesting the importance of this class in the oncology space.

Legal Proceedings

The Company is a party to various legal proceedings and claims that arise in the ordinary, routine course of business and that have not been fully resolved.
In late April of 2022, the Company received a demand letter from Zinc Health Services, LLC (Zinc) asserting that Zinc was entitled to approximately $14.0 million from the Company for claims related to certain sales of UDENYCA from October 2020 through December 2021.

Stakeholder Impact

Shareholders: The UDENYCA sale is expected to provide capital for debt repayment and investment in the immuno-oncology pipeline.
Employees: Approximately 50 employees are expected to transfer to Accord in connection with the UDENYCA Sale.
Patients: The company aims to ensure continued access to UDENYCA and LOQTORZI without disruption.
Customers: The company plans to maintain business continuity for both UDENYCA and LOQTORZI customers.

Next Steps

Complete the UDENYCA Sale.
Advance the clinical development of casdozokitug and CHS-114.
Explore new potential indications for LOQTORZI.
Continue to monitor and improve internal controls over financial reporting.

Key Dates

Date	Description
September 2010	Coherus BioSciences, Inc. was incorporated in Delaware.
December 2012	Entered into a distribution agreement with Orox Pharmaceuticals B.V. / Laboratorio Gador S.A.
November 2014	Completed the initial public offering of common stock.
October 2018	Surface Oncology, Inc. and Adimab LLC entered into an amended and restated development and option agreement.
October 2019	Entered into a license and settlement agreement with Pfizer relating to Coherus patents and applications for patents directed to Humira (adalimumab) formulations.
April 2020	Issued and sold $230.0 million in aggregate principal amount of 1.5% Convertible Senior Subordinated Notes due 2026.
December 2020	Surface entered into the GSK Agreement.
February 1, 2021	Entered into the Collaboration Agreement with Junshi Biosciences for the co-development and commercialization of toripalimab.
March 23, 2021	Surface and Vaccinex, Inc. entered into an exclusive product license agreement.
December 2021	The FDA approved YUSIMRY.
March 2022	Paid $35.0 million for the exercise of the option to license CHS-006.
August 2, 2022	CIMERLI was approved by the FDA.
October 3, 2022	Launched CIMERLI commercially in the United States.
November 8, 2022	Entered into a Sales Agreement with Cowen and Company, LLC.
July 2023	Launched YUSIMRY in the United States.
September 8, 2023	Completed the Surface Acquisition.
October 27, 2023	LOQTORZI was approved by the FDA.
January 2, 2024	Launched LOQTORZI in the U.S.
January 10, 2024	Delivered a notice of termination of the TIGIT Program to Junshi Biosciences.
January 19, 2024	Entered into a Purchase and Sale Agreement with Sandoz.
February 2024	Launched UDENYCA ONBODY.
March 1, 2024	Completed the divestiture of the CIMERLI ophthalmology franchise to Sandoz.
March 11, 2024	Committed to a plan to reduce the workforce by approximately 26 employees.
May 8, 2024	Entered into the 2029 Loan Agreement and the Revenue Purchase and Sale Agreement.
June 26, 2024	Completed the sale of the YUSIMRY franchise to HKF.
June 27, 2024	Entered into the Canada License Agreement with Apotex.
September 13, 2024	Announced that the third-party labeling and packaging CMO for UDENYCA delayed production of UDENYCA.
November 26, 2024	NCCN made a further update to the clinical practice guidelines for NPC to specify that LOQTORZI is the only preferred category 1 first-line treatment option for adults with metastatic or recurrent locally advanced NPC when used in combination with cisplatin and gemcitabine.
December 2, 2024	Entered into the UDENYCA Purchase Agreement with Intas.
February 28, 2025	The number of shares of the registrants common stock issued and outstanding was 115,896,849.
Late in the first quarter or early in the second quarter of 2025	Anticipate the transactions contemplated by the UDENYCA Purchase Agreement to close.

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