Coherus BioSciences, Inc. (NASDAQ:CHRS) - Executing Across All Fronts to Drive Long-Term Value

Published on September 24, 2024 | Ticker: CHRS

Coherus BioSciences, Inc. (NASDAQ:CHRS) is a commercial-stage biopharmaceutical company focused on the research, development and commercialization of innovative immunotherapies to treat cancer. The company has demonstrated strong execution across its key strategic priorities, positioning it for long-term success.

Financials

In 2023, Coherus reported annual net revenue of $257.2 million and a net loss of $237.9 million. The company's annual operating cash flow was -$174.9 million, and its annual free cash flow was -$175.2 million. These financial results reflect the company's investments in its pipeline and commercial operations.

During the first quarter of 2024, Coherus reported total net revenue of $77.1 million, a significant increase from $32.4 million in the same period of 2023. This growth was driven by the strong performance of the company's core products, UDENYCA and LOQTORZI, as well as the launch of YUSIMRY.

Business Overview

UDENYCA, a biosimilar to Neulasta, delivered $42.7 million in net revenue in the first quarter of 2024, an 18% increase quarter-over-quarter and a 63% increase year-over-year. The strength of UDENYCA's performance was fueled by the successful launch of the UDENYCA ONBODY, a novel delivery system, as well as the expansion of payer coverage for the UDENYCA franchise.

LOQTORZI, Coherus' novel PD-1 inhibitor, generated $2.0 million in net revenue during the first quarter of 2024, its first full quarter on the market. The company is making good progress in establishing LOQTORZI as the new standard of care for the treatment of nasopharyngeal carcinoma (NPC), with the product being included in key clinical guidelines and achieving broad payer coverage.

YUSIMRY, a biosimilar to Humira, contributed $3.9 million in net revenue in the first quarter of 2024, representing a 77% increase quarter-over-quarter. Coherus is optimistic about the long-term potential of YUSIMRY, particularly as the company navigates the evolving landscape of the adalimumab market.

Recent Developments

In addition to its commercial successes, Coherus has made significant progress in strengthening its balance sheet and enhancing its financial flexibility. The company recently announced the divestiture of its CIMERLI ophthalmology franchise for $170 million in upfront cash, plus an additional $17.8 million for inventory. This transaction allowed Coherus to pay down a substantial portion of its outstanding term loan debt, reducing interest costs and improving its gross margins.

Furthermore, Coherus has secured a new non-dilutive debt and royalty financing, which fully repays the remaining $75 million of its term loan debt. This transaction extends the maturity timeline for the company's debt obligations, aligning with the development horizon of its product candidates.

Pipeline Progress

Coherus' pipeline of innovative immunotherapies continues to advance, with several key programs progressing as planned. The company's lead clinical-stage asset, casdozokitug, an antibody targeting IL-27, has demonstrated promising efficacy and a favorable safety profile in early-stage studies for non-small cell lung cancer and hepatocellular carcinoma. Coherus is also advancing CHS-114, a CCR8-targeting antibody, and CHS-1000, an antibody targeting ILT4, both of which are designed to modulate the tumor microenvironment.

In addition to its internal pipeline, Coherus is leveraging its PD-1 inhibitor, LOQTORZI, in combination with novel compounds from partner companies. This strategy includes a Phase 3 study with INOVIO in head and neck squamous cell carcinoma, as well as a Phase 3 study with Junshi Biosciences in limited-stage small cell lung cancer.

The company's focus on the tumor microenvironment and its ability to combine LOQTORZI with a diverse array of novel agents position Coherus as a leader in the rapidly evolving immuno-oncology landscape. The company's strategic partnerships and collaborative efforts further strengthen its pipeline and expand the potential applications of its assets.

Liquidity

Coherus' financial position has been bolstered by the recent divestiture and debt refinancing transactions, providing the company with increased financial flexibility to support its ongoing operations and pipeline development. As of March 31, 2024, the company had $259.8 million in cash, cash equivalents, and investments in marketable securities.

Outlook

Looking ahead, Coherus is well-positioned to continue executing on its strategic priorities. The company is reiterating its guidance for combined R&D and SG&A expenses of $250 million to $265 million for the full year 2024, excluding any potential business development activities or other unforeseen events.

Conclusion

In conclusion, Coherus BioSciences has demonstrated strong execution across its commercial, pipeline, and financial fronts, positioning the company for long-term success. The company's focus on innovative immunotherapies, strategic partnerships, and prudent capital management have laid the foundation for sustainable growth and value creation for its shareholders.

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