Coherus BioSciences (CHRS) Update Summary Company Overview - **Company**: Coherus BioSciences - **Focus**: Development of CHS-114, a cytolytic CCR8 targeting antibody for cancer immunotherapy Key Points from the Call Industry and Product Development - **Phase I Study**: The call discussed the Phase I study results of CHS-114 as a CCRA antibody, evaluated both as monotherapy and in combination with Torpalumab in patients with advanced solid tumors, particularly head and neck cancer [2][4] - **Target**: CHS-114 targets CCR8, a G protein-coupled receptor, which is selectively expressed on tumor-resident T regulatory cells (Tregs) [7][6] - **Mechanism**: The goal is to deplete Tregs to enhance the immune response against tumors, turning "cold" tumors "hot" by allowing CD8 T cells to infiltrate [5][6] Clinical Results - **Preclinical Data**: Preclinical models showed that treatment with CHS-114 led to significant depletion of Tregs and enhanced antitumor activity when combined with PD-1 inhibitors [8][9] - **Patient Population**: The study included patients with advanced solid tumors, primarily head and neck cancer, with a median age of around 60 years and a majority being male [23] - **Safety Profile**: The Phase I study demonstrated an acceptable safety profile with no dose-limiting toxicities (DLTs) and a stable disease rate of approximately 50% in heavily pretreated patients [17][25] Efficacy and Biomarker Data - **Response Rates**: The combination therapy showed promising results, with a notable partial response in a patient who had previously failed multiple lines of therapy [26][29] - **Biomarker Analysis**: Significant reductions in CCR8 positive Tregs were observed, with a decrease of 52% to 97% after treatment, indicating a shift towards a more inflamed tumor microenvironment [43][44] - **Durability of Response**: The combination therapy demonstrated durable responses, with ongoing evaluations to assess long-term efficacy [28][26] Future Directions - **Expansion Studies**: Coherus is expanding its studies to include gastric cancer, with ongoing recruitment for trials assessing CHS-114 in combination with Torpalumab [20][19] - **Market Potential**: The second-line treatment space for metastatic head and neck cancer is identified as an unmet medical need, with current standard treatments showing low response rates [77][78] Additional Insights - **Combination Therapy**: The potential for combining CHS-114 with T cell engagers and bispecific antibodies was discussed, emphasizing the importance of a robust CD8 T cell infiltrate for effective treatment [64][65] - **Patient Characteristics**: The responder in the study had a low PD-L1 score, suggesting that targeting Tregs may provide benefits even in patients with traditionally low immunogenicity [81][82] Conclusion - Coherus BioSciences is advancing its clinical development of CHS-114, showing promising early results in targeting CCR8 positive Tregs to enhance immune responses in cancer therapy. The ongoing studies aim to address significant unmet needs in the treatment of advanced solid tumors, particularly in head and neck cancer.

Core Insights - Coherus BioSciences announced promising clinical data for CHS-114, a selective anti-CCR8 antibody, demonstrating efficacy in combination with toripalimab for treating head and neck squamous cell carcinoma (HNSCC) and gastric cancer [1][2][4] - A confirmed partial response was observed in a heavily pretreated PD-1 refractory patient, indicating potential for overcoming PD-1 resistance [2][13] - The ongoing Phase 1b trial aims to optimize dosing and evaluate safety and efficacy, with results expected in the first half of 2026 [1][8] Company Overview - Coherus BioSciences is focused on developing innovative oncology treatments, including the next-generation PD-1 inhibitor, LOQTORZI (toripalimab), and has a pipeline targeting various cancers [16][17] - The company is advancing CHS-114 in combination with toripalimab in two Phase 1b clinical trials for advanced solid tumors, including HNSCC and gastric cancer [15][17] Clinical Trial Details - The Phase 1b trial evaluated CHS-114 as a monotherapy and in combination with toripalimab in 21 patients, focusing on dose-limiting toxicities and treatment-emergent adverse events [5][12] - Key findings include a significant depletion of CCR8+ Treg cells (52-97%) and an increase in CD8+ T cells, supporting the mechanism of action for CHS-114 [6][13] Future Directions - The company plans to continue exploring CHS-114's potential in various solid tumors, with a strategic focus on HNSCC and gastric cancer [4][8] - Upcoming data presentations are expected to provide further insights into the efficacy and safety of CHS-114 in combination therapies [1][9]

Core Insights - Coherus BioSciences has transitioned from marketing biosimilar drugs to focusing solely on its branded drug Loqtorzi (toripalimab) and is now prioritizing the development of its clinical pipeline [1] Company Focus - The company is no longer involved in the marketing of biosimilar drugs and is concentrating on the development of its clinical pipeline [1] Market Position - Coherus BioSciences is currently positioned as a biotech company that trades around significant events such as trial results and NDA/BLA approvals [1]

Core Insights - Coherus BioSciences has completed the divestiture of its UDENYCA franchise to Intas Pharmaceuticals for a deal valued at up to $558.4 million, receiving an upfront payment of $483.4 million [1][3] - The company now has a post-close cash balance of $250 million, extending its cash runway into 2027, which will support the development of its oncology pipeline [1][2] - Coherus is focusing on its innovative oncology programs, particularly the growth of LOQTORZI revenues and advancing its immuno-oncology candidates [2][5] Transaction Details - The transaction closed on April 11, 2025, with Coherus receiving $483.4 million upfront, including $118.4 million for UDENYCA inventory, and potential milestone payments of up to $75 million based on net sales [1][3] - Intas received assets related to the UDENYCA franchise, including pre-filled syringes and autoinjectors, and assumed certain liabilities [3] Company Overview - Coherus is a commercial-stage innovative oncology company with an approved PD-1 inhibitor, LOQTORZI, and a promising pipeline targeting various cancers [5] - The company aims to grow LOQTORZI sales in nasopharyngeal carcinoma and develop new indications in combination with its pipeline candidates [5] Pipeline Information - Coherus' immuno-oncology pipeline includes multiple antibody candidates, such as Casdozokitug, an IL-27 antagonist, and CHS-114, a selective anti-CCR8 antibody, currently in various clinical studies [6][9]

Core Viewpoint - Coherus BioSciences is repurchasing approximately $170 million of its outstanding 1.500% Convertible Senior Subordinated Notes due 2026, contingent upon the closing of the divestiture of its UDENYCA franchise to Intas Pharmaceuticals [1][2][4] Group 1: Repurchase Details - The repurchase will occur at a cash price equal to 100% of the principal amount plus accrued interest [1] - After the repurchase, approximately $60 million of Convertible Notes will remain outstanding, which the company plans to repurchase following the divestiture [3] - The majority of the holders of the Convertible Notes have consented to amendments in the Indenture to facilitate the divestiture transaction [4] Group 2: Company Overview - Coherus BioSciences is a commercial-stage oncology company with an approved PD-1 inhibitor, LOQTORZI, and a promising pipeline targeting various cancers [5][6] - The company is focused on enhancing immune responses through its immuno-oncology pipeline, which includes multiple antibody candidates [6] - Coherus markets LOQTORZI and UDENYCA, with the latter being a biosimilar of Neulasta, and plans to close the divestiture transaction in early Q2 2025 [7]

Core Insights - Coherus BioSciences announced interim data from its Phase 1 clinical trial of CHS-114, a selective anti-CCR8 antibody, which will be presented at the 2025 AACR Annual Meeting [1][2] - The trial evaluates CHS-114 both as a monotherapy and in combination with toripalimab for patients with recurrent/metastatic head and neck squamous cell carcinoma (HNSCC) [1][2] Company Overview - Coherus BioSciences is a commercial-stage innovative oncology company with an approved next-generation PD-1 inhibitor, LOQTORZI, and a growing revenue stream [4] - The company is focused on expanding the use of LOQTORZI in nasopharyngeal carcinoma and developing new indications in combination with its pipeline candidates [4] Clinical Trial Details - The Phase 1 study (NCT05635643) is designed to optimize the dosing of CHS-114 and assess its safety in advanced solid tumors, including HNSCC [2][3] - The study includes multiple cohorts, with Cohort 1a enrolling 20 patients and evaluating various doses of CHS-114, while Cohort 1b focuses on HNSCC patients with paired tumor biopsies [2] Product Information - CHS-114 is an afucosylated, cytolytic CCR8 monoclonal antibody that targets CCR8+ Tregs in the tumor microenvironment, aiming to enhance the immune response against tumors [3] - Preclinical studies have shown that CHS-114 can reduce tumor growth and improve antitumor activity when combined with anti-PD-1 treatment [3] Pipeline and Future Directions - Coherus has a robust immuno-oncology pipeline, including candidates like casdozokitug, which is being evaluated in multiple clinical studies [5] - The company is also planning to divest its UDENYCA franchise, with the transaction expected to close in early to mid-2025 [6]

Sales and Revenue - UDENYCA Sale to Intas for $483.4 million, including $118.4 million in product inventory, with potential earnout payments of $75 million based on sales thresholds [491] - Total net revenues for the company were $267.0 million in 2024, compared to $257.2 million in 2023, reflecting a growth of approximately 3.1% [519] - Total net revenue for 2024 was $266.96 million, an increase of $9.72 million compared to $257.24 million in 2023 [534] - UDENYCA net revenue increased by $78.89 million to $205.95 million, primarily due to increased market share from the launch of UDENYCA ONBODY [535] - CIMERLI revenue decreased by $98.31 million to $27.08 million due to its divestiture in March 2024 [534] - The company anticipates an increase in LOQTORZI's net product revenue in 2025 compared to 2024 [536] - The company reported a net income of $28.51 million in 2024, a significant recovery from a net loss of $237.89 million in 2023 [607] - Basic and diluted net income per share improved to $0.25 in 2024, compared to a loss of $2.53 per share in 2023 [604] - Comprehensive income for 2024 was $28.48 million, compared to a comprehensive loss of $237.89 million in 2023 [607] Clinical Developments - LOQTORZI approved by the FDA for first-line treatment of metastatic NPC, launched in the U.S. on January 2, 2024 [492] - Casdozokitug, targeting IL-27, is in three ongoing clinical studies, including a Phase 1/2 study in advanced solid tumors [493] - CHS-114, targeting CCR8, is enrolling patients in a clinical trial and plans to initiate additional studies in 2025 [494] - LOQTORZI is being evaluated in multiple clinical studies in collaboration with partners, including Junshi Biosciences [507] - The company plans to initiate a Phase 1b clinical study of CHS-114 in combination with toripalimab in advanced solid tumors in Q1 2025 [619] Financial Performance - Research and development expenses totaled $93.3 million in 2024, down from $109.4 million in 2023, indicating a reduction of approximately 14.7% [525] - Selling, general and administrative expenses decreased by $24.28 million to $167.74 million, primarily due to lower headcount and operating costs [541] - Interest expense decreased by $13.38 million to $27.16 million, mainly due to the payoff of $250 million in senior secured term loans [543] - Total costs and expenses decreased to $378.63 million in 2024 from $460.44 million in 2023, representing a 17.8% reduction [604] - The company achieved a gain on sale transactions of $176.59 million in 2024, which was not present in 2023 [604] Asset Management - Cash used in operating activities was $20.4 million in 2024, a significant improvement compared to $174.9 million in 2023 [566][568] - Cash provided by investing activities in 2024 was $230.3 million, mainly from the CIMERLI Sale ($187.8 million) and YUSIMRY Sale ($40.0 million) [569] - The company’s cash, cash equivalents, and restricted cash at the end of 2024 totaled $126.3 million, up from $103.3 million at the end of 2023 [626] - The company recorded interest income of $4.5 million, $2.8 million, and $1.9 million for the years 2024, 2023, and 2022, respectively [630] Liabilities and Obligations - Total financial liabilities decreased to $293.67 million in 2024 from $473.37 million in 2023, primarily due to the repayment of the 2027 Term Loans [551] - The company has an obligation to pay up to $380.0 million in milestone payments to Junshi Biosciences for LOQTORZI, of which $25.0 million has already been paid [516] - The company has contingent milestone obligations totaling $355.0 million related to LOQTORZI, with no other milestones accrued as of December 31, 2024 [559] - Non-cancelable purchase commitments as of December 31, 2024, were $86.5 million, primarily expected to transfer to the Intas Parties upon closing of the UDENYCA Sale [564] Inventory and Production - UDENYCA experienced a temporary supply interruption due to production delays, with resumed production in November 2024 [503] - Inventory write-downs amounted to $14.1 million in 2024, $52.6 million in 2023, and $26.0 million in 2022, primarily due to slow-moving inventory and competitive pressures [639] - The company capitalized inventory costs associated with UDENYCA, CIMERLI, and LOQTORZI after receiving regulatory approvals in November 2018, August 2022, and October 2023, respectively [641] Regulatory and Compliance - NCCN updated guidelines to include LOQTORZI as the only preferred category 1 first-line treatment for NPC [506] - The company recognizes uncertain income tax positions at the largest amount that is more likely than not to be sustained upon audit [675] - The company has entered into license agreements that may be recorded as asset acquisitions if they do not meet the definition of a business [671] Market and Sales Dynamics - Total sales deductions to gross product sales were 83% in 2024, 77% in 2023, and 73% in 2022 [578] - A 10% change in total provisions for product sales discounts and allowances as of December 31, 2024, would have resulted in a change of approximately $27.6 million in pre-tax earnings [578] - The allowance for chargebacks is based on an estimate of sales through to Healthcare Providers from the Customer [657] - Revenue from product sales is recorded at the net sales price, which includes estimates of variable consideration such as chargebacks, rebates, and discounts [655]

Financial Data and Key Metrics Changes - Coherus reported Q4 2024 net product sales for UDENYCA at $46.3 million, a 28% increase from $36.2 million in Q4 2023. For the fiscal year 2024, UDENYCA net sales were $206 million, a 62% increase from $127.1 million in 2023 [24][10]. - LOQTORZI net revenue was $7.5 million in Q4, a 29% increase quarter-over-quarter, with fiscal year 2024 revenue at $19.1 million [28][10]. - Cost of goods sold (COGS) decreased from $159 million in 2023 to $118 million in 2024, primarily due to lower COGS from divested products and reduced inventory write-offs [53][54]. - Total GAAP R&D and SG&A expenses for 2024 were $261 million, reflecting decreases in both categories compared to 2023 [54][55]. Business Line Data and Key Metrics Changes - UDENYCA's market share in Q4 was 15%, with an exit share of 22%, and the company expects continued market share growth in 2025 [26][10]. - LOQTORZI's eligible patient population is approximately 2,000 annually, with a focus on relapsed locally advanced and first-time metastatic patients [29][10]. - The number of new accounts purchasing LOQTORZI grew by 37% in Q4, indicating strong market penetration [31][10]. Market Data and Key Metrics Changes - The company anticipates that LOQTORZI will achieve a dominant market share position in the MPC market, estimated to be valued at $150 million to $200 million [37][10]. - The NCCN updated guidelines in November 2024 placed LOQTORZI in a preferred position for metastatic and locally recurrent MPC patients, which is expected to drive increased usage [34][10]. Company Strategy and Development Direction - Coherus aims to maximize revenues with LOQTORZI, expand its indications, and advance its proprietary pipeline [8][10]. - The company has successfully addressed its balance sheet debt issue and expects to have $250 million in cash post-transaction close, which will support development efforts through key data milestones in 2025 and 2026 [10][12]. - The divestiture of the UDENYCA franchise is a significant strategic change, with expectations to complete the transaction in late Q1 or early Q2 2025 [10][11]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the divestiture of UDENYCA, stating that there are no anticipated obstacles to its completion [64][10]. - The company is focused on enhancing investor appreciation of its value proposition post-transaction, particularly with a strong balance sheet and promising data on the horizon [12][10]. Other Important Information - The company has divested at least $800 million in assets or commitments, paying off $480 million in debt, and expects to maintain a strong financial position moving forward [17][10]. - The FDA authorization for selling final packaged products from a new contract manufacturer is the primary remaining condition for the UDENYCA divestiture [13][10]. Q&A Session Summary Question: Are there any hurdles expected with the UDENYCA divestiture? - Management sees no obstacles and believes the divestiture will proceed as planned, with all necessary reviews completed [64][10]. Question: Does the $250 million cash projection include cost savings from headcount reduction? - The $250 million projection is based on cash after the transaction, with a headcount reduction expected to decrease from 225 to 155 employees [67][70]. Question: Where is LOQTORZI currently being used? - LOQTORZI is being used in a mix of recurrent locally advanced and metastatic first-line patients, with expectations for increased usage due to updated guidelines [77][10]. Question: What is the FDA looking for regarding the second supplier's labeling and packaging? - The FDA requires validation runs and data review from the new contract manufacturer, which has been completed [82][10]. Question: What are the expectations for the CCR8-tori combo data? - The company anticipates robust data on immune cell ratios and T-reg depletion, which are critical for efficacy [122][10]. Question: How much off-label use of other PD-1s exists in the MPC market? - There is ongoing off-label use, particularly in community settings, and the company is actively working to increase awareness of LOQTORZI [131][10].

Financial Data and Key Metrics Changes - 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 [24][10]. - Cost of goods sold (COGS) decreased to $118 million in 2024 from $159 million in 2023, primarily driven by lower COGS from divested products and reduced inventory write-offs [53]. - Total GAAP R&D and SG&A expenses for 2024 were $261 million, reflecting decreases in both R&D and SG&A due to lower headcount and cost savings from biosimilar divestitures [54]. Business Line Data and Key Metrics Changes - LOQTORZI net revenue was $7.5 million in Q4, a 29% increase quarter-over-quarter, with fiscal year 2024 revenue at $19.1 million [28]. - UDENYCA market share in Q4 was 15% with an exit share of 22%, with expectations for continued market share growth in 2025 [26]. Market Data and Key Metrics Changes - The company reported that nearly 80% of all NCCN institutions have used LOQTORZI for at least one patient, with a 37% increase in new accounts purchasing LOQTORZI in Q4 [30]. - The NCCN updated MPC guidelines in November 2024, placing LOQTORZI in a preferred position for metastatic and locally recurrent MPC patients [34]. Company Strategy and Development Direction - The company aims to maximize revenues with LOQTORZI, expand its indications, and advance its proprietary pipeline in innovative oncology [8]. - The divestiture of the UDENYCA franchise is a significant strategic change, expected to close in late Q1 or early Q2, which will enhance the company's focus on oncology [10][11]. - The company has divested at least $800 million in assets or commitments, paying off $480 million in debt, positioning itself with $250 million in cash post-transaction [17]. Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the divestiture process, stating there are no expected obstacles and that investor support is strong [64]. - The company is focused on enhancing investor appreciation of its value proposition post-transaction, with a strong balance sheet and promising data expected in the future [12]. Other Important Information - The company has made substantial progress in its strategic transformation, including the acquisition of Surface Oncology for $40 million, which adds promising oncology candidates to its pipeline [15]. - The company expects to reduce headcount by 30% post-transaction, with a significant portion of off-balance sheet commitments transitioning to the buyer [57]. Q&A Session Summary Question: Are there any hurdles expected with the UDENYCA divestiture? - Management sees no obstacles and believes the divestiture will proceed as planned, with all necessary reviews completed [64][65]. Question: Does the $250 million cash projection include cost savings from headcount reduction? - The $250 million represents expected cash after the transaction, net of payoffs and other cash flows, and does not specifically account for headcount reduction savings [67][68]. Question: Where is LOQTORZI currently being used now that it has both front line and second line in guidelines? - LOQTORZI is being used in a mix of recurrent locally advanced and metastatic first-line patients, with expectations for increased use due to updated guidelines [73][76]. Question: What is the FDA looking for regarding the second supplier's labeling and packaging? - The FDA requires validation runs and data review from the new contract manufacturer, which has been completed [81][82]. Question: What are the expectations for the head and neck cancer data in the first half of this year? - The company anticipates reporting data from around 30-35 patients, focusing on safety, early efficacy, and biomarker data [100]. Question: How much continued use is there of off-label IO agents in the MPC market? - There is ongoing off-label use, particularly in community settings, and the company is actively working to increase awareness of LOQTORZI and the NCCN guidelines [131][134].

Financial Performance - Coherus BioSciences, Inc. will present preliminary unaudited net revenues for Q4 2024 and the fiscal year ended December 31, 2024 at the 42nd Annual J.P. Morgan Healthcare Conference[4] - The financial closing procedures for Q4 2024 are not yet complete, which may lead to significant changes in the preliminary unaudited results[5] Product Demand - Due to strong demand in Q4 2024 and into Q1 2025, all three presentations of UDENYCA are being temporarily allocated[6]