8-K: Coherus BioSciences Reports Strong Q3 2024 Revenue Growth Driven by Oncology Focus

Coherus BioSciences saw a 30% increase in UDENYCA revenue and a 50% increase in LOQTORZI revenue quarter-over-quarter, driving strong overall revenue growth in Q3 2024.

Summary

• Coherus BioSciences reported a net revenue of $70.8 million for the third quarter of 2024.
• UDENYCA net product sales reached $66.1 million, a 30% increase compared to the previous quarter and a 100% increase compared to Q3 2023.
• LOQTORZI net product sales were $5.8 million, a 54% increase compared to the second quarter of 2024.
• The company's third-party labeling and packaging contract manufacturing organization (CMO) for UDENYCA is resuming production this week, a few weeks later than previously targeted.
• A backlog of approximately 120,000 UDENYCA units is expected to be completed by the end of the year.
• An additional CMO is expected to start manufacturing saleable product by the end of 2024, with commercial supply commencing in the first quarter of 2025.
• The company projects its labeling and packaging capacity will double to over one million UDENYCA units annually once the second facility is operational.
• The number of LOQTORZI treated patients grew by more than 60% in Q3, with new patient uptake primarily in relapsed locally advanced and 1L metastatic disease.
• Coherus expects to open a Phase 2 study for casdozokitug in combination with toripalimab and bevacizumab for HCC this quarter.
• Final data from a Phase 2 trial of casdozokitug combined with atezolizumab and bevacizumab in first-line HCC is expected in the first quarter of 2025.
• Phase 1 data from expansion cohorts evaluating CHS-114 is expected in the first half of 2025.
• The company plans to initiate Phase 1b dose optimization studies of CHS-114 in combination with toripalimab in patients with HNSCC and gastric cancer in the first quarter of 2025.
• Net loss for the third quarter of 2024 was $10.8 million, or $(0.09) per share, compared to a net loss of $39.6 million, or $(0.41) per share for the same period in 2023.
• Net income for the nine months ended September 30, 2024 was $79.2 million, or $0.65 per share, compared to a net loss of $158.2 million, or $(1.79) per share for the same period in 2023.
• Non-GAAP net loss for the third quarter of 2024 was $1.7 million, or $(0.01) per share, compared to $26.9 million, or $(0.27) per share for the same period in 2023.
• Non-GAAP net loss for the nine months ended September 30, 2024 was $53.8 million, or $(0.47) per share, compared to $117.3 million, or $(1.33) per share for the same period in 2023.
• Cash, cash equivalents and investments in marketable securities were $97.7 million as of September 30, 2024, compared to $117.7 million as of December 31, 2023.
• Coherus projects combined R&D and SG&A expenses for 2024 to be in the range of $250 to $260 million.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong revenue growth, pipeline advancements, and improved financial performance. However, the delay in UDENYCA production and the relatively low cash position are minor concerns.

Positives

• UDENYCA sales saw substantial growth, increasing 30% quarter-over-quarter and 100% year-over-year.
• LOQTORZI sales also experienced significant growth, increasing 54% quarter-over-quarter.
• The company is making progress in diversifying its labeling and packaging resources with a second CMO expected to start production soon.
• The company is advancing its immuno-oncology pipeline with multiple clinical studies planned or underway.
• The company has significantly reduced its net loss compared to the same period last year, and has achieved net income for the nine months ended September 30, 2024.
• The company has reduced its operating expenses and interest expenses.

Negatives

• The resumption of UDENYCA production at the third-party CMO was delayed by a few weeks.
• The company experienced a net loss of $10.8 million for the third quarter of 2024, although this is a significant improvement compared to the same period last year.
• Cash, cash equivalents and investments in marketable securities decreased from $117.7 million at the end of 2023 to $97.7 million as of September 30, 2024.

Risks

• The company is reliant on third-party contract manufacturing organizations for the production of its products.
• The company's future results are subject to risks and uncertainties inherent in the clinical drug development process.
• The company's future results are subject to risks and uncertainties related to the regulatory approval process.
• The company's future results are subject to risks and uncertainties of possible litigation.
• The company's future results are subject to risks and uncertainties related to manufacturing and supply of Coherus products.

Future Outlook

Coherus expects continued growth in its oncology business, driven by UDENYCA and LOQTORZI, and is advancing its immuno-oncology pipeline with multiple clinical studies planned or underway. The company projects combined R&D and SG&A expenses for 2024 to be in the range of $250 to $260 million.

Management Comments

• Revenue growth was strong in the third quarter, with the UDENYCA franchise increasing 30% compared to the second quarter, and 100% over Q3 2023.
• LOQTORZI sales grew more than 50% compared to the second quarter of 2024.
• Our sharpened focus on oncology is delivering results.
• Third quarter 2024 revenues are now comparable to Q3 2023, despite our divestitures, with higher gross profit, lower operating expenses and lower interest expense.
• We continue to make progress towards our long-term vision of bringing innovative, next-generation therapies to extend cancer patient survival.
• Our competitively positioned pipeline, in combination with LOQTORZI, is advancing to plan in tumor types with high unmet medical need and with robust supportive biology.

Industry Context

The report highlights Coherus's strategic shift towards oncology, aligning with the growing focus on targeted therapies and immunotherapies in the pharmaceutical industry. The company's success with UDENYCA and LOQTORZI demonstrates its ability to compete in the biosimilar and oncology markets. The advancement of its immuno-oncology pipeline positions it to capitalize on the increasing demand for innovative cancer treatments.

Comparison to Industry Standards

• Coherus's 30% quarter-over-quarter growth in UDENYCA sales is strong compared to the biosimilar market, where single-digit growth is more common for established products. For example, Amgen, the originator of Neulasta, has seen declining sales of Neulasta due to biosimilar competition.
• The 54% quarter-over-quarter growth in LOQTORZI sales is impressive for a newly launched oncology product, indicating strong market uptake. This compares favorably to other recent oncology drug launches, where initial uptake can be slower.
• The company's focus on immuno-oncology is in line with industry trends, with companies like Bristol Myers Squibb, Merck, and Roche heavily investing in this area. Coherus's pipeline, including casdozokitug and CHS-114, positions it to compete in this space.
• The company's reduction in operating expenses and interest expenses is a positive sign, as many biotech companies struggle with profitability. This is a key differentiator compared to other companies in the sector that are still in the early stages of development and have high burn rates.
• The company's cash position of $97.7 million is relatively low for a company with multiple clinical programs, which may require additional capital raising in the future. This is a common challenge for biotech companies, especially those with ongoing clinical trials.

Stakeholder Impact

• Shareholders will likely view the strong revenue growth and improved financial performance positively.
• Employees may be encouraged by the company's progress and future prospects.
• Customers (patients and healthcare providers) will benefit from the continued availability of UDENYCA and LOQTORZI, as well as the development of new therapies.
• Suppliers and contract manufacturers will continue to play a key role in the company's operations.
• Creditors will be reassured by the company's improved financial position.

Next Steps

• The company will open a Phase 2 study for casdozokitug in combination with toripalimab and bevacizumab for HCC this quarter.
• The company expects final data from a Phase 2 trial of casdozokitug combined with atezolizumab and bevacizumab in first-line HCC in the first quarter of 2025.
• The company expects Phase 1 data from expansion cohorts evaluating CHS-114 in the first half of 2025.
• The company plans to initiate Phase 1b dose optimization studies of CHS-114 in combination with toripalimab in patients with HNSCC and gastric cancer in the first quarter of 2025.

Key Dates

Keywords

UDENYCA, LOQTORZI, Oncology, Biosimilar, Immunotherapy, Casdozokitug, CHS-114, Clinical Trials, Pharmaceuticals, Biotechnology