Coherus BioSciences Earnings Call Highlights Transition and Growth

Coherus Biosciences ((CHRS)) has held its Q1 earnings call. Read on for the main highlights of the call.

The recent earnings call for Coherus BioSciences presented a company in transition, with a focus on promising growth prospects for LOQTORZI and positive clinical developments. Despite facing challenges in market penetration and short-term revenue impacts due to restructuring, the strategic focus on oncology and potential cost savings are positive indicators for future performance.

LOQTORZI Growth Prospects

LOQTORZI is projected to become a significant revenue source for Coherus BioSciences, with expectations to grow to about $150 million to $200 million annually over the next three years. This growth is anticipated to provide non-dilutive funding for the company’s development pipeline as indications for LOQTORZI expand.

Positive Clinical Developments

The earnings call highlighted positive clinical developments, including CHS-114 showing a 40% reduction in target lesions in a late-line head and neck cancer patient, indicating potential to address PD-1 resistance. Additionally, a 17% complete response rate was observed in a liver cancer trial with casdozokitug, showcasing promising results.

Strategic Partnerships and Indication Expansion

Coherus BioSciences has secured several strategic partnerships to expand indications for toripalimab. Notable collaborations include those with INOVIO for HPV-positive head and neck cancer and Junshi for small cell lung cancer, which are expected to broaden the use of their treatments.

Successful Restructuring and Cost Savings

The company has successfully restructured, expecting $25 million in annualized savings from a reduced headcount following the UDENYCA divestiture. More than half of these savings have already been realized, contributing to the company’s financial health.

Flat Revenue Despite Demand Growth

Despite a 15% growth in patient demand for LOQTORZI in Q1, revenue remained flat at $7.3 million due to a seasonal inventory drawdown. This highlights the challenges of aligning revenue with demand growth.

Transition Challenges

Coherus BioSciences is undergoing a transition to focus solely on LOQTORZI, which involved remapping territories and restructuring the sales force. These changes have posed short-term headwinds for the company.

Market Penetration Challenges

Despite recommendations from the NCCN guidelines for LOQTORZI, some patients continue to receive non-preferred chemo-only and off-label IO treatments, indicating challenges in market penetration.

Continued Losses in Discontinued Operations

The company reported a net loss from discontinued operations of $9.2 million in the quarter, a significant change from a net income of $170.9 million in Q1 last year, reflecting the financial impact of their strategic shifts.

Forward-Looking Guidance

Coherus BioSciences’ forward-looking guidance emphasizes its strategic shift to an innovative oncology business, with LOQTORZI sales in nasopharyngeal carcinoma projected to grow significantly. The company is executing an indication expansion strategy with multiple partnerships and pivotal trials to broaden LOQTORZI’s use. They also anticipate annualized savings from headcount reductions and project SG&A expenses for 2025 to be between $90 million and $100 million.

In summary, Coherus BioSciences’ earnings call reflects a company in transition, with a focus on growth prospects for LOQTORZI and positive clinical developments. While challenges in market penetration and short-term revenue impacts are present, the strategic focus on oncology and potential cost savings are promising indicators for future performance.