erus BioSciences(US:CHRS)2021-08-08 16:14Financial Data and Key Metrics Changes - For Q2 2021, the company reported a net loss of $29.9 million on a GAAP basis, with cash flow from operating activities being nearly breakeven at negative $200,000 [25][31] - Net product revenue for UDENYCA was $88 million, an increase from $83 million in the previous quarter, while the cost of goods as a percentage of net revenues increased from the prior quarter [26][27] - The company expects gross margins of around 85% for the full year 2021, with a projection to return to 90% or higher starting in 2024 [28][54] Business Line Data and Key Metrics Changes - UDENYCA's market share declined from 20% to 19% quarter-to-quarter, with wholesaler inventory remaining stable [8][22] - The company anticipates launching four new products in the U.S. over the next two years, expanding its diversified product portfolio [7][34] - The biosimilar pipeline, including candidates for Lucentis, Humira, and Avastin, addresses a combined market opportunity of $28 billion [10][11] Market Data and Key Metrics Changes - The pegfilgrastim market grew approximately 2% quarter-to-quarter, with UDENYCA's share declining primarily from the least profitable segment [22] - The company expects modest revenue growth in the second half of 2021, driven by stability in average selling prices (ASP) compared to competitors [23] Company Strategy and Development Direction - The company is transitioning from a single product biosimilar company to a diversified biopharma company with multiple oncology assets [6][34] - The focus remains on the immuno-oncology market, with toripalimab as a foundational asset, and the company is open to exploring non-immuno-oncology assets [20][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating uncertainties related to COVID-19 and pricing pressures from competitors [23][47] - The company anticipates significant clinical data announcements and regulatory milestones in the coming months [34] Other Important Information - The company received $50 million from Junshi Biosciences for common stock associated with the toripalimab licensing transaction [31] - Research and development expenses for Q2 2021 were $54.8 million, reflecting costs to advance the late-stage pipeline [29] Q&A Session Summary Question: UDENYCA market dynamics and pricing - Management noted that while Amgen is pushing prices down, they are focused on maintaining their ASP and taking market share from the originator [36][37] Question: Commercial build-out for CHS-1420 - The company is conducting market research for sales force structure but does not anticipate substantial increases in commercialization efforts [39][40] Question: ZIEXTENZO market share dynamics - Management indicated that ZIEXTENZO's share gains are primarily from the least profitable segment, and their focus remains on taking share from Onpro [42][44] Question: ASP stability and competitive dynamics - Management confirmed that ASP is currently stable but may change in future quarters due to competitive pricing behavior [46][47] Question: Interchangeability with Humira and market penetration - Management believes that the lack of interchangeability will not significantly impede market penetration and expects to achieve a 10% market share for the Humira biosimilar [52][53]