Coherus BioSciences (CHRS) Conference Call Summary Company Overview - **Company**: Coherus BioSciences - **Event**: Jefferies Global Healthcare Conference - **Date**: June 04, 2025 Key Industry Insights - **Focus Areas**: Coherus Oncology is concentrating on three main areas: - Lactorsi (proprietary PD-1 asset) for nasopharyngeal cancer - CHS-114 (anti-CCR8 cytolytic antibody) - Casdozo ketog (IL-27 antagonist) [4][6][40] Core Product Highlights - **Lactorsi**: - Launched in 2024, it is the only preferred treatment for both first-line and follow-on lines in nasopharyngeal cancer - Expected revenue of $40 to $50 million in 2025 [12][40] - Targets a market of approximately $150 to $200 million annually [11] - Demonstrated a 15% increase in overall demand from the previous quarter [12] - **CHS-114**: - Targets T regulatory cells, aiming to selectively deplete them in tumors to enhance immune response - High expression of CCR8 in various solid tumors, including head and neck, gastric, and colorectal cancers [18][23] - Anticipated data readouts in the first half of 2026 [6][8] - **Casdozo ketog**: - First-in-class IL-27 antagonist showing promise in liver cancer with a 38% overall response rate and a 17% complete response rate [33][36] - Expected to enter a global study comparing it with standard care [35] Financial Overview - **Debt Reduction**: Successfully reduced debt to approximately $38.7 million annually after divesting $800 million worth of assets [7][42] - **Cash Position**: Ended Q1 2025 with $82 million in cash, bolstered by a $250 million increase post-divestiture [42][44] - **Cost Management**: Plans to reduce workforce from 225 to about 50 employees, yielding $25 million in savings [42] Strategic Partnerships and Market Opportunities - **Partnerships**: Actively seeking partners for ex-US licensing of pipeline assets [40][41] - **Market Potential**: Combined market opportunity for pipeline assets exceeds $15 billion [6][40] Additional Insights - **Mechanistic Differentiation**: Lactorsi's unique binding mechanism allows for internalization of the PD-1 receptor, enhancing T cell signaling, particularly in low PD-L1 states [9][10][43] - **Clinical Development**: Robust clinical programs with expected results in 2026, focusing on large indications with multibillion-dollar market potential [43][44] - **Regulatory Engagement**: Positive alignment with the FDA regarding the development approach for CHS-114 and Casdozo ketog [28][41] This summary encapsulates the critical points discussed during the conference call, highlighting the strategic direction, product pipeline, financial health, and market opportunities for Coherus BioSciences.

Financial Data and Key Metrics Changes - The net loss from discontinued operations for Q1 2025 was $9.2 million compared to a net income of $170.9 million in Q1 2024, primarily due to a $153.6 million gain on the sale of the Similee ophthalmology franchise in March 2024 [49][50] - Revenue for Q1 2025 was flat at $7.3 million, attributed to a seasonal inventory drawdown despite a 15% growth in patient demand [39][40] - Cost of Goods Sold (COGS) from continuing operations increased to $2.7 million from $1.4 million in Q1 2024 due to increased sales of Lactorsi [48] Business Line Data and Key Metrics Changes - Lactorsi is projected to grow to approximately $150 million to $200 million annually over the next three years, providing non-dilutive funding for the development pipeline [10] - The commercial team reported a 15% growth in patient demand for Lactorsi, with an increase in new patient starts and duration of treatment [39][40] Market Data and Key Metrics Changes - The market for nasopharyngeal carcinoma (NPC) is estimated to be valued at $150 million to $200 million, with expectations for Lactorsi to achieve a dominant share [43] - The restructuring of the sales force was completed, and the team is now focused on driving growth in the NPC patient population [38] Company Strategy and Development Direction - The company is focused on innovative oncology, with three core pillars: Torapalumab (Lactorsi), CHS-114 (a selective CCR8 cytolytic antibody), and casdosoketogue (an anti-IL-27 antibody) [7][14] - A key part of the strategy includes partnerships for indication expansion, where the company supplies drugs to partners who fund clinical trials [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to changes in the FDA and emphasized the importance of strong development expertise [54][57] - The company anticipates that Q2 and Q3 will be times for growth, following the restructuring of the sales force [69] Other Important Information - The company expects to achieve approximately $25 million in annualized savings from lower headcount following the divestiture of UDENYCA [47] - The company has received $483 million in upfront cash from the UDENYCA divestiture and plans to repurchase remaining convertible notes [45] Q&A Session Summary Question: What needs to happen for a significant inflection point for Lactorsi? - Management noted that awareness among providers is increasing, and they expect to see an acceleration in growth following the restructuring of the sales force [53][58] Question: Can you clarify what you meant by patient demand for Lactorsi? - Demand refers to actual patient growth as indicated by clinics purchasing the product from wholesalers, which is distinct from revenue [66][67] Question: Will there still be an impact from the sales force restructure in Q2? - Management believes the impact was primarily in Q1, and they expect Q2 and Q3 to be times for growth [69] Question: Are PD-1s like Keytruda still being used off-label in NPC? - Yes, off-label use of PD-1s is prevalent, especially in community settings, despite NCCN guidelines recommending Lactorsi [73][79] Question: Can you discuss the Type D meeting with the FDA for CHS-114? - The meeting focused on aligning on Project Optimus, and the FDA found the company's approach acceptable [84][86]

Financial Data and Key Metrics Changes - The company reported a revenue of $7.3 million for Q1 2025, which remained flat due to a seasonal inventory drawdown despite a 15% growth in patient demand [38][39] - Cost of Goods Sold (COGS) from continuing operations increased to $2.7 million from $1.4 million in Q1 last year, attributed to increased sales of Lactorsi [47] - Research and Development (R&D) expenses decreased by 14% to $24.4 million, reflecting savings from reduced co-development with Junshi [48] - Selling, General and Administrative (SG&A) expenses decreased by 35% to $26 million, primarily due to lower headcount and non-recurring charges from the previous year [48] Business Line Data and Key Metrics Changes - The company is now focused solely on its innovative oncology business, with Lactorsi being the only FDA-approved treatment for metastatic recurrent locally advanced nasopharyngeal carcinoma [6][8] - Lactorsi is projected to grow to approximately $150 million to $200 million annually over the next three years, providing non-dilutive funding for the development pipeline [8][9] - The commercial team has successfully remapped territories and updated customer assignments post-UDENYCA divestiture, with a focus on driving growth in appropriate NPC patients [37][38] Market Data and Key Metrics Changes - The company noted a significant number of patients still receiving non-preferred chemotherapy and off-label immuno-oncology treatments, indicating a market opportunity for Lactorsi [38] - The NCCN guidelines now place Lactorsi in a preferred position for recurrent and metastatic patients, which the company is actively promoting to healthcare providers [38][41] Company Strategy and Development Direction - The company’s strategy is anchored around three core pillars: Lactorsi, CHS-114 (a selective CCR8 cytolytic antibody), and casdosoketogue (an anti-IL-27 antibody) [6][12][13] - The company aims to expand Lactorsi's indications through partnerships and combination therapies, enhancing its market presence and revenue potential [10][11] - The focus on innovative oncology is expected to drive long-term value for shareholders while addressing significant unmet medical needs in cancer treatment [50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company’s ability to navigate recent FDA changes and emphasized the importance of strong development expertise in adapting to regulatory environments [52][56] - The company anticipates that the restructuring of the sales force will lead to accelerated growth in Q2 and beyond, despite transitional challenges faced in Q1 [60][68] - Management highlighted the promising clinical data for CHS-114 and its potential to address PD-1 resistance, which could significantly impact treatment paradigms in oncology [30][36] Other Important Information - The company completed the divestiture of UDENYCA, receiving $483 million in upfront cash and repurchasing $170 million of convertible notes [43][44] - The net cash from these transactions is expected to provide substantial liquidity for ongoing operations and development initiatives [44] Q&A Session Summary Question: What needs to happen for a significant inflection point for Lactorsi? - Management noted that increased awareness among providers and ongoing clinical trials will be crucial for driving adoption and market share [51][56] Question: Can you clarify patient demand for Lactorsi? - Demand is defined as actual patient growth, with a 15% increase in end-user demand reported, indicating strong physician engagement [65][66] Question: Will the Salesforce restructure impact future projections? - The impact of the restructure was primarily felt in Q1, but management expects Q2 and Q3 to be growth periods for the brand [68] Question: Are there any competitor molecules that have proven the efficacy of CCR8 targeting? - Management indicated that while selectivity is a challenge, there are emerging data points suggesting the relevance of CCR8 targeting in certain tumor types [72][75]