erus BioSciences(US:CHRS)2019-03-01 01:08Financial Data and Key Metrics Changes - Research and development (R&D) expenses decreased by $4.8 million in Q4 2018 compared to the same quarter last year and by $52.2 million in 2018 compared to 2017, primarily due to reduced costs associated with anti-TNF programs [21][22] - Selling, general and administrative (SG&A) expenses increased by $18.9 million in Q4 2018 compared to the same quarter last year and by $22.9 million in 2018 compared to 2017, mainly due to costs related to hiring a sales force for UDENYCA [24] - Net loss attributable to Coherus for Q4 2018 was $62.6 million, or $0.92 per share, compared to a net loss of $49.1 million, or $0.84 per share, for the same period in 2017 [27] Business Line Data and Key Metrics Changes - UDENYCA launch is proceeding as planned, with initial performance aligning with internal projections and a list price approximately 33% below that of Neulasta [7][8] - UDENYCA has been utilized by patients across all three provider segments: oncology clinics, 340B hospital outpatient, and non-340B hospital outpatient facilities [10] - Coverage for UDENYCA is at parity or better compared to Neulasta in over 90% of insurers, including major national payers [11][12] Market Data and Key Metrics Changes - The company has secured coverage among both Medicare and commercial insurers, with no rejected or unpaid claims reported [12] - Some payers have adopted policies to prefer biosimilars, including UDENYCA, over Neulasta, indicating a shift in market dynamics [12][45] Company Strategy and Development Direction - The company aims to leverage its experience from the oncology market to support the launch of its Humira biosimilar CHS-1420, expected in late 2023 [18][19] - The strategy includes a branded service-oriented approach that is believed to be applicable across different therapeutic areas, including ophthalmology [20] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with market reception and alignment among key segments, indicating that the strategic approach is yielding positive results [30] - The company anticipates that additional biosimilar entrants could accelerate market conversion rather than negatively impact its position [32] Other Important Information - Cash and cash equivalents totaled $72.4 million as of December 31, 2018, with an additional $73.1 million raised in January 2019, bringing the pro forma total to $145.5 million [25][26] Q&A Session Summary Question: 2019 revenue expectations and SG&A/R&D run rate - Management indicated that market expectations are consistent with their internal projections and that SG&A expenses will increase in 2019 due to the launch [29][31] Question: Market share and competition - Management noted that they are approaching the entire market and that competition primarily pressures the innovator rather than other biosimilar participants [32] Question: Utilization across market segments - Management stated it is too early to determine segment penetration but confirmed adoption across all three market segments [34][43] Question: Pricing and Onpro device plans - Management refrained from providing specific net pricing guidance but emphasized the value proposition of UDENYCA being 33% below Neulasta [39][41] Question: Insurer policies on biosimilars - Management reported that some insurers are beginning to prefer biosimilars over Neulasta, although this is still a small percentage of the market [44][45]