erus BioSciences(US:CHRS)2021-05-10 05:44Financial Data and Key Metrics Changes - For Q1 2021, the company reported a net loss of $173 million on a GAAP basis, while on a non-GAAP basis, it reported a net income of $400,000 or approximately $0.01 per share [52][53] - Net product revenue for UDENYCA was $83 million, a decline from $110 million in Q4 2020 and $116 million in Q1 2020, primarily due to seasonal fluctuations in wholesale inventory and increased allowances and discounts [8][54] - Research and development expenses increased to $203.5 million from $33.1 million in the same period last year, mainly due to a $145 million upfront payment to Junshi Biosciences and other development costs [55] Business Line Data and Key Metrics Changes - UDENYCA maintained a market share of 20%, which remained flat compared to the previous quarter, while the overall pegfilgrastim market grew by 1% [8][10] - The company anticipates revenue growth in the second half of 2021 as treatment patterns normalize post-COVID and pricing trends stabilize [61] Market Data and Key Metrics Changes - The overall pegfilgrastim market experienced a 1% growth in Q1 2021, while UDENYCA's average selling price (ASP) declined by 6% compared to Q4 2020 [8][10] - The company expects to capture at least 10% market share in new biosimilar markets, including Lucentis, Humira, and Avastin, which collectively represent a $28 billion market opportunity [19][20] Company Strategy and Development Direction - The company is focusing on diversifying and growing revenues through investments in biosimilars and immuno-oncology products, leveraging cash flows from biosimilars to enter the $25 billion immuno-oncology market [6][20] - The collaboration with Junshi Biosciences for toripalimab is seen as a transformational step into the immuno-oncology market, with plans for multiple regulatory submissions and clinical trials [28][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about UDENYCA's market share growth as COVID-19 recedes, with expectations for increased sales in the second half of 2021 [61] - The company is preparing for the potential launch of toripalimab and other biosimilars, with significant clinical data and regulatory milestones expected in the coming months [62] Other Important Information - The company ended Q1 2021 with cash, cash equivalents, and marketable securities of $399.5 million, down from $541.2 million at the end of 2020 [57] - The company is increasing its expected operating expenses for 2021 to a range of $370 million to $400 million, excluding the upfront payment to Junshi Biosciences [58][59] Q&A Session Summary Question: Impact of severe weather on Q1 results - Management indicated that while severe weather was a factor, the primary impacts were from inventory changes and pricing pressures [64][66] Question: Demand expectations for UDENYCA - Management suggested that demand could be around $100 million for the first quarter, factoring in inventory adjustments [64][67] Question: Toripalimab's interim data and BLA submission - Management believes the interim data is sufficient for a BLA submission, with no additional studies anticipated [70][71] Question: Normalization of pegfilgrastim usage - Management expects a shift away from Onpro as COVID recedes, which could benefit UDENYCA [77][78] Question: Pricing dynamics for pegfilgrastim - Management noted ongoing pricing erosion but anticipates stabilization as competition increases [79][80] Question: Interchangeability status for biosimilars - Management has not pursued interchangeable status but is open to considering it in the future [111][112]