Coherus Biosciences ((CHRS)) has held its Q4 earnings call. Read on for the main highlights of the call.
Coherus BioSciences’ recent earnings call painted a picture of both significant achievements and notable challenges. The company celebrated strong revenue growth and strategic transitions, including pipeline expansion, while also acknowledging hurdles such as supply interruptions, market penetration issues for LOQTORZI, and dissatisfaction with the current stock price.
Record UDENYCA Sales Increase
Coherus BioSciences reported a remarkable increase in UDENYCA net product sales, reaching $46.3 million in Q4, up 28% from the previous year’s $36.2 million. For the fiscal year 2024, UDENYCA net sales soared to $206 million, marking a 62% increase compared to 2023. This growth underscores the product’s strong market performance and demand.
Successful Strategic Transition and Debt Reduction
The company achieved significant strategic milestones, including maintaining a $250 million cash position post-transaction and reducing its debt by $480 million. Additionally, Coherus divested at least $800 million in assets or commitments, reflecting a successful strategic transition and financial strengthening.
LOQTORZI Revenue Growth
LOQTORZI demonstrated promising revenue growth, with net revenue reaching $7.5 million in Q4, a 29% increase quarter-over-quarter. For the fiscal year 2024, LOQTORZI’s net revenue totaled $19.1 million, indicating a positive trajectory despite market penetration challenges.
Promising Pipeline Acquisitions
Coherus expanded its pipeline through the acquisition of Surface Oncology for $40 million, acquiring assets such as the first-in-class anti-IL-27 agent, casdozokitug, and a cytolytic CCR8 antibody, CHS-114. These acquisitions are expected to enhance the company’s future growth prospects.
Temporary Supply Interruption of UDENYCA
The company faced a temporary supply interruption for UDENYCA, resulting in a $12 million charge due to inventory write-downs. This issue highlights the operational challenges that can impact product availability and financial performance.
Challenges with LOQTORZI Market Penetration
LOQTORZI encountered difficulties in market penetration, primarily due to a lack of awareness in community settings and competition from the off-label use of Keytruda. These challenges indicate the need for enhanced marketing strategies to boost product visibility and adoption.
Stock Price Dissatisfaction
Despite the strategic progress, Coherus expressed dissatisfaction with its current stock price, suggesting challenges in investor perception. This sentiment underscores the need for improved communication with investors to align market valuation with the company’s achievements.
Forward-Looking Guidance
Looking ahead, Coherus BioSciences provided optimistic guidance, with expectations of maintaining a $250 million cash position post-UDENYCA divestiture and a cash runway extending beyond two years. The company plans a 30% headcount reduction, with 50 employees transitioning to the divestiture buyer. Coherus aims to maximize revenues with LOQTORZI, expand its indications, and advance its proprietary pipeline, targeting a potential $15 billion sales opportunity when combined with LOQTORZI.
In summary, Coherus BioSciences’ earnings call highlighted a blend of strong revenue growth and strategic achievements, tempered by operational challenges and market perception issues. The company’s forward-looking guidance suggests a focus on leveraging its pipeline and strategic assets to drive future growth.