Executive Summary / Key Takeaways

• Strategic Transformation Complete: Coherus Oncology has successfully pivoted from a biosimilar-focused entity to a specialized, commercial-stage innovative oncology company, shedding non-core assets and significantly reducing debt to fund its promising pipeline.
• LOQTORZI Driving Near-Term Growth: LOQTORZI, a differentiated next-generation PD-1 inhibitor, is establishing itself as the standard of care in nasopharyngeal carcinoma (NPC), with Q2 2025 net revenue of $10.0 million (up 36% QoQ) and a projected $150-$200 million annual market opportunity in NPC alone.
• Differentiated Pipeline with Key Catalysts: The company's pipeline features potentially first-in-class (casdozokitug, anti-IL-27) and best-in-class (CHS-114, anti-CCR8) assets, with critical clinical data readouts anticipated in the first half of 2026, offering significant label expansion opportunities for LOQTORZI.
• Strengthened Financial Position: Post-divestiture, Coherus boasts a robust balance sheet with $238 million in cash and investments as of Q2 2025, providing a projected cash runway through 2026, well beyond upcoming clinical milestones.
• Competitive Technology and Capital Efficiency: Coherus leverages its unique PD-1 binding technology and highly selective pipeline antibodies, coupled with a capital-efficient development strategy through partnerships, to carve out a distinct competitive niche in the crowded immuno-oncology landscape.

The Strategic Metamorphosis: From Volume to Value

Coherus Oncology, Inc. has undergone a profound strategic transformation, evolving from a diversified biosimilar developer to a focused, commercial-stage innovator in the high-stakes field of oncology. Incorporated in 2010, the company initially made its mark with biosimilar launches like UDENYCA (pegfilgrastim-cbqv) in 2019, expanding its offerings with autoinjector and on-body presentations through early 2024. This early success in biosimilars provided a foundation, but a deliberate strategic pivot began in January 2021 with the in-licensing of toripalimab, a differentiated PD-1 inhibitor, from Junshi Biosciences. This move was not merely an expansion but a foundational shift, recognizing the strategic imperative of owning a proprietary PD-1 to anchor an innovative oncology pipeline.

The commitment to oncology deepened with the September 2023 acquisition of Surface Oncology for a net $40 million, bringing global rights to promising candidates: casdozokitug (an anti-IL-27 agent) and CHS-114 (a cytolytic CCR8 antibody). This portfolio, initially underappreciated, is now central to Coherus's vision of delivering a "step change in survival for cancer patients." To streamline this focus and fortify its capital structure, Coherus executed significant divestitures throughout 2024 and early 2025, including CIMERLI ($187.8 million), YUSIMRY ($40 million), and most notably, the UDENYCA franchise to Intas Pharmaceuticals for an upfront $483.4 million. These actions, totaling over $800 million in divested assets and commitments, enabled the company to pay off approximately $480 million in debt, including nearly all of its $230 million convertible notes and a $47.7 million UDENYCA royalty obligation. This strategic repositioning culminated in the company officially changing its name to Coherus Oncology, Inc. in May 2025, signaling its singular focus.

The broader industry landscape for oncology is characterized by intense competition and rapid technological change, with large pharmaceutical and biotechnology companies commanding significant resources. Healthcare reform measures, such as the Inflation Reduction Act (IRA) and the recently enacted One Big Beautiful Bill Act (OBBBA), are exerting downward pressure on drug pricing and reimbursement, particularly impacting government programs like Medicare and Medicaid. This environment necessitates highly differentiated products, capital efficiency, and strategic partnerships—all tenets of Coherus's refined strategy. The company operates as a challenger in this space, leveraging its agility and specialized focus against the broader portfolios and deeper pockets of rivals like AbbVie (ABBV), Amgen (AMGN), Pfizer (PFE), and Viatris (VTRS).

LOQTORZI: A Differentiated Anchor in Immuno-Oncology

LOQTORZI (toripalimab-tpzi) stands as the commercial anchor of Coherus Oncology, a next-generation PD-1 inhibitor that has demonstrated clear technological differentiation. Its unique mechanism involves binding to the FG loop on the PD-1 receptor, which translates to significantly higher potency compared to standard-of-care PD-1s. This mechanistic advantage has yielded tangible clinical benefits, particularly in low PD-L1 cancers. For instance, while other PD-1 treatments have lost approval for low PD-L1 esophageal cancer in the U.S., toripalimab has been approved across all PD-L1 levels for first-line esophageal cancer in the EU, validating its genuine mechanistic and clinical differentiation.

In its approved indication for recurrent or metastatic nasopharyngeal carcinoma (NPC) in the U.S., LOQTORZI demonstrated a compelling 37% improvement in overall survival versus standard of care in a pivotal study, earning it a top ranking on NCCN guidelines as a preferred, Category 1 first-line treatment option. This robust clinical profile is driving its commercial uptake. In Q2 2025, LOQTORZI net revenue reached $10.0 million, marking a 36% increase over Q1 2025 and a 65% increase year-over-year. This growth is fueled by increasing adoption, with over 90% of the 33 NCCN institutions having used LOQTORZI, a 20% growth in new purchasing accounts, and a 22% increase in repeat use.

The market opportunity for LOQTORZI in NPC alone is estimated at $150 million to $200 million annually, with management projecting a dominant market share and peak revenues by 2028. While academic centers have shown strong adoption, a significant growth opportunity lies in the community setting, which accounts for over half of addressable patients. Coherus is addressing this with a multi-pronged approach in the second half of 2025, including refreshed messaging, KOL-driven digital content, and real-time data to target physicians at the point of diagnosis. The company's competitive edge in NPC is clear: it is the only FDA-approved and NCCN-preferred PD-1 with positive data in this indication, mitigating risks from off-label use of competitors like Keytruda or potential biosimilar entry, which would lack the specific NPC label.

Innovative Pipeline: Expanding Horizons Through Novel Mechanisms

Beyond LOQTORZI's direct sales, Coherus's long-term value proposition is deeply intertwined with its innovative pipeline, which is strategically designed to expand LOQTORZI's label through synergistic combinations. The pipeline includes two mid-stage clinical candidates, CHS-114 and casdozokitug, both targeting significant unmet needs in large oncology markets.

CHS-114: A Best-in-Class Treg Depleter

CHS-114 is an investigational human afucosylated IgG1 monoclonal antibody selectively targeting CCR8, a chemokine receptor highly expressed on regulatory T cells (Tregs) within the tumor microenvironment. Tregs are known suppressors of anti-tumor immunity, and selectively depleting them is a major goal in oncology. CHS-114's technological differentiation is its exceptional selectivity; it is the only known anti-CCR8 Treg depleting agent with no off-target binding, a critical advantage that may avoid unexpected toxicities observed with some competitors. This selectivity is particularly challenging to achieve for GPCR targets like CCR8, which have limited protein on the cell surface for antibody binding.

Clinical data from a Phase 1b study in recurrent/metastatic head and neck squamous cell carcinoma (HNSCC) presented at AACR 2025 demonstrated compelling proof of mechanism. Treatment with CHS-114 resulted in greater than 50% depletion of CCR8-positive Tregs in paired tumor biopsies, accompanied by a marked increase in tumor-infiltrating CD8+ T cells. This immune activation is crucial for anti-tumor responses. Remarkably, a partial response and significant reduction of target and non-target lesions were observed in a heavily pretreated, fourth-line HNSCC patient refractory to prior PD-1 inhibition, suggesting CHS-114's potential to reverse PD-1 resistance. Coherus is actively enrolling an additional 40 HNSCC patients in an earlier, second-line setting, with efficacy and safety data expected in the first half of 2026. Further Phase 1b studies are ongoing in second-line gastric cancer and esophageal squamous cell carcinoma, with safety data expected in the first half of 2026 and efficacy data in the second half of 2026. These indications represent substantial market opportunities: $4.5 billion for second-line HNSCC, $3.5 billion for second-line gastric cancer, and nearly $1 billion for esophageal cancer. Management anticipates that anti-CCR8s will emerge as a "new treatment backbone" by 2026, and CHS-114's best-in-class selectivity positions Coherus strongly in this competitive, yet broadly validated, therapeutic class.

Casdozokitug: Pioneering IL-27 Antagonism

Casdozokitug (CHS-388) represents a unique "first-in-class" opportunity as the only known anti-IL-27 treatment currently in development. Interleukin-27 (IL-27) is an immune regulatory cytokine that facilitates tumor growth by inducing checkpoint expression, reducing pro-inflammatory cytokines, and affecting natural killer cells. Preclinical models have highlighted IL-27's role in suppressing T cells and NK cells in lung and liver tissues, guiding Coherus's focus on these indications. Casdozokitug has received Orphan Drug and Fast Track designations from the FDA for hepatocellular carcinoma (HCC).

Earlier clinical data in first-line HCC (in combination with atezolizumab and bevacizumab) showed a 38% overall response rate (ORR) and a 17% complete response (CR) rate, significantly outperforming historical benchmarks of approximately 30% ORR and 8% CR rate for atezolizumab/bevacizumab alone. Building on this, Coherus is conducting a randomized Phase 2 study (NCT06679985) evaluating casdozokitug in combination with LOQTORZI and bevacizumab in first-line HCC, with initial efficacy and safety data expected in the first half of 2026. The company is also planning a randomized Phase 2 study in squamous non-small cell lung cancer, where prior monotherapy activity was observed. The U.S. market opportunity for HCC alone is estimated at $4 billion. Coherus holds global rights to casdozokitug, making ex-U.S. licensing a priority to secure non-dilutive financing and offset development costs.

Financial Strength and Capital-Efficient Growth

Coherus's strategic transformation has fundamentally reshaped its financial profile. The divestiture of its biosimilar businesses, particularly the UDENYCA franchise, generated substantial cash, enabling a dramatic reduction in debt. As of June 30, 2025, the company reported $238 million in cash and investments, with management projecting this to provide a cash runway through 2026, extending beyond the anticipated key data readouts for CHS-114 and casdozokitug. This strengthened liquidity position is critical for funding its innovative oncology pipeline.

Operating expenses reflect the company's strategic shift. While R&D expenses from continuing operations increased to $26.3 million in Q2 2025 (from $20.6 million in Q2 2024), driven by increased investments in casdozokitug and CHS-114, selling, general, and administrative (SG&A) expenses decreased to $26.0 million in Q2 2025 (from $27.5 million in Q2 2024). This SG&A reduction is primarily due to lower headcount, with annualized savings of approximately $30 million expected from Q2 headcount reductions, targeting less than 150 FTEs by year-end for an additional $5 million in annualized savings. Full-year 2025 SG&A is projected to be between $90 million and $100 million. Interest expense from continuing operations also decreased due to debt repayments. The significant net income from discontinued operations in Q2 2025 ($342.6 million) was primarily due to the $339.1 million net gain on the UDENYCA divestiture.

Coherus's financial strategy emphasizes capital efficiency, particularly in pipeline development. By supplying LOQTORZI to partners who then fund clinical trials for combination therapies, Coherus can expand LOQTORZI's label cost-effectively. This approach, combined with potential ex-U.S. licensing deals for its proprietary assets, aims to monetize global rights, provide non-dilutive financing, and offset development costs. This model allows Coherus to compete effectively against larger, more resource-rich pharmaceutical companies by focusing on high-impact, differentiated assets and strategic collaborations.

Risks and Outlook

Despite the successful transformation, Coherus faces inherent risks. The company has a limited history of profitability from its innovative oncology business and future profitability remains uncertain, especially given the revenue contribution from the divested UDENYCA franchise. The commercial success of LOQTORZI and pipeline candidates depends on market acceptance, pricing, and reimbursement, which are subject to intense competition and evolving healthcare policies. Clinical trials for CHS-114 and casdozokitug are lengthy, expensive, and carry inherent risks of delays or failures. Furthermore, the company received a Nasdaq notice for its bid price falling below $1.00, with a compliance deadline of December 29, 2025, posing a potential delisting risk. There is also no guarantee of receiving the $75 million in earnout payments from the UDENYCA sale, which are contingent on specific net sales thresholds.

However, the outlook is underpinned by several catalysts. LOQTORZI's continued growth in NPC, targeting $40 million to $50 million in 2025 revenue, is expected to progressively cover commercial and R&D costs. The anticipated data readouts for CHS-114 and casdozokitug in the first half of 2026 are critical inflection points that could validate the pipeline's potential and unlock significant value through label expansion and ex-U.S. partnerships. The company's strengthened balance sheet, reduced debt, and disciplined cost management provide a solid foundation to execute on these objectives.

Conclusion

Coherus Oncology has meticulously engineered a strategic pivot, transforming itself into a focused innovative oncology company with a clear vision for extending cancer patient survival. By divesting its biosimilar portfolio and strategically reducing debt, the company has fortified its balance sheet, providing the necessary capital to advance a pipeline of highly differentiated, next-generation immuno-oncology assets. LOQTORZI, with its unique technological profile and strong clinical data in NPC, serves as a growing commercial anchor, while CHS-114 and casdozokitug represent promising future catalysts with the potential to establish new treatment paradigms in large, underserved oncology markets.

The company's commitment to scientific rigor, capital-efficient development through strategic partnerships, and disciplined financial management positions it to compete effectively in a challenging yet high-growth industry. Investors should closely monitor the continued market penetration of LOQTORZI, particularly in the community setting, and the critical clinical data readouts for CHS-114 and casdozokitug in early 2026. These milestones, coupled with ongoing efforts to secure ex-U.S. licensing deals, will be instrumental in validating Coherus Oncology's innovative approach and realizing its long-term value creation potential.